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website link
http://www.stanelco.co.uk/index.htm

JJS - your comment was rather tempting fate !!!

JJS probably saw this on another BB. The poster is in all likelyhood PM1 :-))

Gary H - 17 Apr'06 - 20:04 - 62035 of 62040

Howard has been in the USA since late last week, possibilities of USA news next week have thus increased :)

No news doesn't worry me. But news often does.

Looking at the Notice of AGM there are two Special Resolutions. The second is to permit the Company to make market purchases of its own shares - up to 94,279,873 shares, which it says is "approximatly 10% of the issued shares.

I thought share buy backs were a means of enhancing shareholder value by the reverse of dilution (concentration?). Anyone know anything about this now with SEO? And what is the significance of the very specific number of shares that could be involved?

tonyrelaxes
Very interesting

tonyrelaxes
Very interesting

tonyrelaxes
Very interesting

Not very significant really, Tony.
The constitution of most companies allows for the purchase of its own shares at any time, but the mandate to do so, and the very strict rules over how many, how much and when has to be reviewed at every AGM and refreshed for the coming 12 months.
Standard AGM resolution, I believe.
Alan

I think it depends on whether they are kept as treasury stocks or not. If treasury then that should not really effect the sp and "resold" later or can be used to fund acquisitions or options etc.
I think possibly without requiring an AGM

The overall value of the company is to effected.

But check what I have written.

Hello again,

It looks like I did speak too soon, with the SP changing direction soon after I last posted :(

I wonder if the MMs are working an order, as we don't usually see this much volatility on such low volumes ?

Tony,

Might I suggest that the buyback could be used as a blocking move, to prevent a hostile takeover bid ?

If you add up the number of shares already tightly held, and add the 10% buyback, then see whats left, is it than less than 50% of the stock ?

Thanks all.
My query was really about any significance of the specific number of shares involved - neither a round number nor a specific percentage.
The reasons for buybacks can only be good.
Further query - is there a "closed period" during which the Company cannot buy back ahead of news that could affect the SP? If not it arrears the Directors could use their knowledge of upcoming events/announcements to buy back for the benefit of both the Company and Shareholders - a thoroughly good move!

Hello again, JJS

I take it you're not going to answer my question then, and we dont really know whether Howard was in the States last week - he could have been at the South Pole for all we really know.

Oblo [ Hi :-) ]

See my post 16015 re Howard's travels.

Thanks Tony - already did. Just being argumentative!

Still like to know how these things get started, though. You read things on these BB's that people post with authority and you wonder 'how can they possibly know that?' - Know what I mean? If it originated from PM1, 'nuff said, nothing surprises!

I think JJS, having made the post, you could have answered even if to say you were just copying an unsubstantiated post from elsewhere. Like I said, fact is we dont know where Howard was last week, so why pretend we do?

Tony, it would be good if this is a new addition to the special resolutions !! If it is it would mean they expect soon to have enough cash flow to start buying back their shares to, as you say, concentrate and therefore increase the value.

Perhaps the filter tow patent is in fact going to be very valuable :) ????

I believe that buy backs are also used to provide shares for employee share schemes and for directors options/emoluments/get rich quick schemes. However if they cancel 10% it will enhance the price.

PapalP
I cannot find my copy of the Annual Report y/e 31 Oct 2004 to see it this is a new item or not.

rpaco
I think employee share scheme etc issues come from new, previously unissued shares. Pages 43 and 44 of latest Annnual report shows numbers of shares which can be issued in the future under various Employee and Management Incentive schemes.

Would such buy back have an adverse effect on the SP,
ie;to keep at a lower price could be advantageous to the company?
cyril

Cyril.
Not so sure a buy back lowers the price. Thinking about it, in theory it should be neutral at that time.
In the books a buy back depletes cash but at the same time reduces the number of shares that participate in the remaining net assets.
A buy back reduces the number of shares in circulation so each remaining share has a greater proportion of the Company's Market Cap.
Presumably Directors will only carry out a buy back if they think the overall market worth of the Company is to rise more than market anticipation.
Directors have a better idea of what news is in the pipeline so could use that knowledge to the Company' shareholder's advantage by reducing the number of shares in circulation with a buy back prior to releasing that news or its resulting profits.
Hence my query about a possible Closed Period or such activities.
I have no idea of the tax implications for the Company of buy back transactions or how differences between Nominal Value and Price are dealt with - possibly via the Share Premium Account.