Recorduroy, I think you are on the money. The strategy that you...

Recorduroy, I think you are on the money. The strategy that you outlined is exactly as i see it also.

Normally a companies strategy during a share buyback would be to maximise share holder value, through buying shares back at a low price. Linqs strategy will be to increase the shareprice so that every holder, from the mum and dad investor to the large investment company, convert their options to shares come 20th January. If all options get converted Linq will then increase the share base from 130m to 260m shares, hence doubling the amount they can generate in their management fees.

In order for all options to be converted, I would expect that Linq would want the share price to be above $1.10. For a 10% return most would ensure they have the $1.00 set aside to convert their share. If it was less than a 10% return some may not bother, it may be all to hard to beg, borrow and steal to convert their options.

Linq would probably hold off many large purchases till November if the NTA is going to get into $1.40s as this should increase the share price naturally. Could also be some great news coming out from some of their large holdings, ie Riversdale and Oilex and it would be nice if Wedgetail would start to move with feasability and finance complete.

However they would also want to get the shareprice up by December to ensure that individuals and companies have their money set aside to connvert the options in the new year.

Also of interest is the amount set aside for the buyback. 13m not just a nice convenient 10% of shares on issue. The average daily volume of LRF traded over the last 3 months is 255,000 shares daily. Or 16,625,00 over a 3 month period. If you took out the day when 6m were traded (probably a share transaction crossing) you are looking at around 10m shares traded in a 3 month period. From October 20 it is exactly 3 months to January 20. Linqs 13m buy back will comfortably mop up any low priced shares.

The added bonus is that any shares bought back below the diluted NTA, currently around $1.20, will further add to the discount to NTA and further increase shareholder value.

The way i see it is LRF is a no brainer.