Observed recently that Olam has buy back close 20m of its own shares over the last 2-3 months.That is a whopping $36m worth of purchase in cash (assume a price of $1.8/shr).Since Olam already as a small float of less than 20% after the buyback initiated by Temasek a while ago, I wonder why they are doing this? Is it because some major shareholders is/are unloading?or it is something else?I doubt it is the minority shareholders that is unloading because they did not let go at $2.2 (from the Temasek offer) a while ago.
Remember, a while ago, Temasek sold 20% of their shareholding to Mitsubishi Lifestyle at $2.7 apiece.Right now, the two largest shareholders are Temasek and Mitsubishi. This is followed by the Kewalram family, CEO and its senior management staff.
I am still vested with Olam and will follow on this with interest. The positive thing about Olam right now is that they have prune away a substantial part of the unprofitable business and interest rate on debts have come down with Temasek backing.
I'm guessing Mitsubishi will acquire it, with Temasek and Kewalram tendering their shareholdings to them. For the price, taking $2.70 has a guide, there's big upside from current price.
ReplyDeleteWhat are your thoughts?
Just curious, why do you think shareholders are unloading (instead of accumulation) to result in the share buyback?
DeleteI don't really know. My best guess is that some management staff that were previously lock from selling their shares (during the temasek offer) is selling some of their shares to raise cash for their personal purposes.
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