ABB: Buyback at 900/share -->Is it easy money?

#1
Hi Guys,

I was told that ABB is buying back shares at 900/share whereas the current price is about 650/share.
1. Since 1 out of every 2 shares will be bought, (50 to 75 percent share stake raising), is this easy money to be made?
2. How would a share buy back work? Can I use ICICIDirect to sell it to ABB?

thanks!
 

rvm123

Active Member
#2
u cannot sell these shares thro' ICICI direct at Rs.900/-. Through ICICI, u can sell only at market rate, which is about Rs.826/- today. The company will send an intimation letter to you. if u are interested, u can fill the form and other details and send to them. then they will buy back and send the money to u
 
#3
u cannot sell these shares thro' ICICI direct at Rs.900/-. Through ICICI, u can sell only at market rate, which is about Rs.826/- today. The company will send an intimation letter to you. if u are interested, u can fill the form and other details and send to them. then they will buy back and send the money to u
i bought ABB today in the initial trade. caught up buying at 860 and then the stock went down. i booked a loss of 4000 rs today. istill have half of the position. can i expect 860-880 tomorrow?

I think the stock has 52-week high around 880. if it crosses that, it can go up to Rs 900. What is ur take? shud i exit the stock and book more losses?
 

rvm123

Active Member
#4
In today's Economic times, ABB advertisement was there giving open offer @ Rs.900/- per share. So all the shareholders will get the offer letter individually. You can apply for that and sell @ Rs.900/- per share. Get the shares transferred to your Demat Account and wait for offer letter form ABB
 

magnet

Active Member
#5
First listen or study clearly

900 offer will come...means company will buy from period july 6(i guess)...to july 26(again i guess)
Which means company will send letter to all shareholders having shares that they willing to pay 900 buck for every share u hold

Now what clearly need to understand is That 900 is the maximum limit at which company can stretch to buy its shares....Its not compulsory they will buy from u...

Means if in market share is trading at 820...they will buy at 820 rather than buying at 900 from u...The company if it gets its desire shares on same day 6th july from open market at cheaper rate u might even not get any buy back letters..

Recently i heard same about shree astaviniyak(or something like that)...Shares trading at 14 ...company using 25 crore rupee amount to buy-back at max 21....But share value was still going down...than i read on a site...They buying limited quanity of shares and since no demand shares are in excess so it still wasnt going at that price of 21

Same is being seen for abb after 1 day rise to 850+...it still is below 900...which means share is in excessand hence trading at price down than buy back price....
I am sure before buy back starts it will surely touch 750 per share...That will be a good price to buy and during buy back period u can atleast make 10-20% in worst case

Also check this

http://www.moneycontrol.com/news/ma...emensindia-to-discontinue-experts_458539.html
 
Last edited:

Logik

Active Member
#6
Same is being seen for abb after 1 day rise to 850+...it still is below 900...which means share is in excessand hence trading at price down than buy back price...
this is obvious......ppl are not gonna buy it above 900 in expectation of selling @ 900. this is the reason why price will never go too near to 900.

alright, nicely written post. i have few qs

1. lets say i have 10 shares of ABB. so in that case is company gonna buy all the 100% shares from me or only fixed % of the total holding. (i heard they are buying 60% of what ur holding)

2. what about the payment. is it b4 the shares delivery or after. i mean company gonna collect the shares first & then i have to w8 for the payment. or money first & then shares. (this is kind of impossible :D)

LogikZ

PS: this might help
http://www.sebi.gov.in/faq/buybackfaq.html
 

rvm123

Active Member
#7
as per Economic Times article dt.19.5.10, the company wants to acquire 22.9% of shares, whereas public holdings is less than 15% and so the company has to convince institutional investors, who hold total 33.6%. If that is true, individual shareholders who want to surrender can get their holdings fully taken over. But, payment will always be after finalisation of the scheme. Hence, u hv to surrender yr shares and wait for the payment, which may take 15 to 30 days after the offer is closed.
 
#10
First listen or study clearly

900 offer will come...means company will buy from period july 6(i guess)...to july 26(again i guess)
Which means company will send letter to all shareholders having shares that they willing to pay 900 buck for every share u hold

Now what clearly need to understand is That 900 is the maximum limit at which company can stretch to buy its shares....Its not compulsory they will buy from u...

Means if in market share is trading at 820...they will buy at 820 rather than buying at 900 from u...The company if it gets its desire shares on same day 6th july from open market at cheaper rate u might even not get any buy back letters..

Recently i heard same about shree astaviniyak(or something like that)...Shares trading at 14 ...company using 25 crore rupee amount to buy-back at max 21....But share value was still going down...than i read on a site...They buying limited quanity of shares and since no demand shares are in excess so it still wasnt going at that price of 21

Same is being seen for abb after 1 day rise to 850+...it still is below 900...which means share is in excessand hence trading at price down than buy back price....
I am sure before buy back starts it will surely touch 750 per share...That will be a good price to buy and during buy back period u can atleast make 10-20% in worst case

Also check this

http://www.moneycontrol.com/news/ma...emensindia-to-discontinue-experts_458539.html
Thanks, a good lesson to learn what is actually behind buy back drama
 

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