In today’s briefing:
- Whitehaven Coal Suspension of Buyback: A Negative Despite Rising Coal Price/ Potential Acquisition
Whitehaven Coal Suspension of Buyback: A Negative Despite Rising Coal Price/ Potential Acquisition
- The pivot in capital allocation plans of Whitehaven Coal (WHC AU) by suspending its buyback program (up to 25% of outstanding shares) is a big negative for us.
- We think the increase in capex spending in a frothy pricing environment and focus on M&A for spending the 2.6 bn of cash is a coin toss on capital allocation.
- We prefer names that keep their capital allocation plans consistent, e.g., Indo Tambangraya Megah (ITMG IJ), and would take money off the table here.
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