BRITANNIA CASE STUDY ON BUY BACK OF SHARES

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BRITANNIA CASE STUDY ON BUY BACK OF SHARES

THE OFFER:


  • To buyback fully paid-up equity shares of face value Rs.10 each.

  • Offer from the open market through the stock exchange.

  • Offer to buyback a maximum of 10,00,000 shares at a price not exceeding Rs.750 per equity share, payable in cash.
  • Maximum Buyback amount not exceeding Rs 550 million.

  • Buyback Size represents 23.37% of the aggregate of the Company’s paid up equity capital and free reserves.

  • Maximum number of shares to be bought back i.e. 10,00,000 shares, represent 3.59% of the paid up equity capital of the Company.

  • Maximum number of equity shares permitted to be bought back is 69,62,613 representing 25% of the total paid-up capital of the Company i.e. 278,50,450 equity shares of Rs. 10/- each.

  • Maximum number of shares to be bought back i.e. 10,00,000 shares, representing 3.59% of the paid up equity capital of the Company.

  • Maximum Buyback amount is 550 million which is 23.37% of the aggregate of the Company’s paid up capital & free reserves.

  • The Company has substantial reserves.

  • The Company intends returning surplus cash to the shareholders.

  • The Buyback is expected to enhance the earnings per share of the company in future and create long term shareholder value.

  • Date of opening of Buyback - Not earlier than Sept 10, 2001

  • Acceptance of Shares - Within 15 days of the relevant payout dates of the Stock Exchanges.

  • Extinguishment of Shares - Within 7 days of acceptance

  • Last date for Buyback - July 27, 2002 or earlier.

  • Stock Exchanges - BSE & NSE.

  • Merchant Bankers- IL&FS Merchant Banking Services.

  • Brokers - Investmart India Ltd, JM Morgan Stanley, Kotak Securities.

  • The Company has appointed the brokers through whom the purchases and settlement on account of the Buyback would be made & the Company will pay the buyback consideration to the brokers on every settlement date.

  • The Buyback of Shares will be made only through the order matching mechanism except “all or none” order matching system.

  • The Shares of the Company will be traded in the compulsory demat mode.

  • The shares shall be extinguished within 7 days from the date of acceptance of the shares
 
DEFINITION of 'Buyback'

The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buy back shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may be looking for a controlling stake.

To get the clear picture on the above mention topic is given below:

BUY BACK OF SHARES

Buy Back of Shares

Buy Back of Shares
 
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