Method of Buyback
Autor: alpha smith • November 2, 2016 • Essay • 338 Words (2 Pages) • 578 Views
Tender Offer Method
Illustration – 1
Current Market Price : Rs. 55 per share
No. of shares announced to be
Bought back by the company : 1,00,000
Mode of buyback : Tender offer
Buyback price announced by the
Company : Rs. 75 per share (ie at a premium of Rs. 20 per
Share over the prevailing market price)
Total shares offered for buyback at the buyback price | Decision taken by the company | Total number of shares accepted by the company for buyback |
1). 4,00,000 | a). Extend the size of buyback and repurchase all the shares. OR b). Purchase the shares pro rata, ie., 1,00,000 / 4,00,000 x 100 = 25% of each shareholders offering. | 4,00,000 1,00,000 |
2). 50,000 | a). Cancel the offer OR b). Buyback all the shares which are tendered, even if it is less than the number specified. OR c). Extend the time period of the offer. | NIL 50,000 50,000 + number subscribed for during the extended time period. |
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