Ann: SWM announces on-market buy-back, page-33

It really is the most ridiculous valuation at these levels. Sure, it doesn't help to have a 40% plus shareholder who doesn't care much about smaller shareholder interests, BUT ultimately as stock is bought back and KS's shareholding creeps higher, he will likely look to take out minority holders as some have suggested. Why? Because if he owns the business outright he accesses a monster cash cow. For example, assume approx 10% of shares bought back, meaning about 1.44b on issue. Even at a stock price of $1.00 (a takeover value?) and $1.44b market cap, for argument's sake, in a year's time and estimated net debt (assuming no big deal) of $200m, that is an EV of $1.64b. But KS need only buy out under 55% of outstanding stock, given his shareholding creeping up. That would be an investment of .55*$1.44b or $792m. Add in the net debt of $200m and he's using $992m of invested capital in a potential deal. For that, he gets his hands on (consolidates) over $200m of annual cash generation. It's a cash return of well over 20%. To me, that shows a clear pathway to a $1 valuation. KS must licking his lips as the buyback kicks in, knowing that ultimately he can own this huge cash generator, with very limited debt, for a song