Australia | Jun 13 2006
By Terry Hughes
Although it is already too late to purchase shares to directly participate in the Coles Myer (CML) buyback, the analysts at Intersuisse see a potential short term trading opportunity in the stock.
They are advising investors to consider buying the stock now and tendering into the buyback.
The tender process commenced on June 8th and ends one month later and according to the broker tenders can be lodged at discounts of 5-14% of the market price.
The market price will be calculated as the weighted volume average of the shares over the five trading days up to and including the closing date of July 7th, the analysts add.
For existing shareholders the analysts say those with low marginal tax rates and an appetite for income may benefit from selling their shares into the buyback and repurchasing on market.
This is because Intersuisse has found that offering shares at a Final Price Tender, for those that have previously bought on market at least as many shares as are likely to be accepted is a good strategy for superfunds and other low tax payers.
Of further interest is the fact that all of the buyback price over $3.00 will be fully franked for tax purposes.