Post 1H dividend, GMA have circa $300m of excess capital that can buy back about a third of shares on issue. GMA today announced their intention to buy back up to 11% of issued shares on market.
If GMA loses the CBA contract, GMA share price will likely fall and having a buy back in place means GMA can scoop up shares really cheaply and enhance total buy-back capability to maybe 50% of outstanding shares.
If GMA retain CBA, GMA’s share price will likely rise and GMA will have taken advantage of the current share price slump - with each share bought back at currently depressed prices is “worth” 20-30% more than what GMA pays for it.
In the world of investment banking pitch books, simple win-win scenarios win.
Ann: Notification of buy-back - GMA, page-2
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