I am planning to submit a tender to buyback shares, just before cutoff on Friday.
There is no particular thought out strategy behind this but it seems like it gives most optionality.
No one knows the final buy back price till the VWAP is announced (though I thought we should be getting close to knowing that or is there is more than one way of calculating it?)
I believe the management or board has the ability to vary the size of the buyback tender, against some criteria predefined, or with discretion, based on their view of the Capital and cash needs of the business.
The Capital portion of each share buy back amount is fixed at around the $9 level (per the Offer booklet) and the dividend portion is adjusted to make up the difference. Being as the proceeds are paid to our SMSF we expect a small refund 0n 2017/18 tax return for the SMSF which is in Pension mode.
I was thinking to buy more RIO shares to replace the RIO holding which is up 30% on our 2013 purchase price, and which we see has good prospects. We are largely Buy and Hold investors, but I am attracted to Writing covered call options as a way to generate extra income in a low tax SMSF environment.
Because I don't know how many shares will be purchased, I don't yet know how many shares to buy to retain the stake, or obviously, what the price will be next week.
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If readers would see benefit in haring their thoughts and strategies, or comments on the above we might all gain some wisdom.
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