The NRMA Insurance Group share buyback offer has generated such a large amount of interest that it could become oversubscribed.
Last week, NRMA mailed out buyback offer documents to its 1.6 million shareholders, and has since been inundated with acceptance applications and phone calls from interested so-called ‘mum and dad’ investors.
A spokesperson said yesterday “thousands of applications turn[ed] up already before the offer even opened”.
Some analysts are saying that NRMA will need to scale back the offer due to the huge response. This could even involve small shareholders not being able to sell all their shares in the buyback and having to sell the rest through a stockbroker. This might frustrate shareholders who were attracted to the offer because of the absence of brokerage fees.
The NRMA spokesperson says it is too early to say whether the insurer would be forced to scale back the offer. Such a decision will be made on May 21. The offer closes on May 16, with the final buyback price being announced the following day.
NRMA has set an indicative price of $2.72 per share, but may change it based on the performance of the all industrials index between May 2 and May 16.
