Kerry Stokes is likely to increase his stake in Seven Group Holdings without spending a cent, showing one-time nemesis James Packer he is still the master of powerbase consolidation.
Seven Group on Wednesday announced a plan to buy back almost 12 million shares, or about 3.9 per cent of the company. It is expected to begin on January 13.
While Seven would not state Mr Stokes' position on the buyback, history suggests the billionaire is unlikely to take part, thus increasing his stake in the company with fewer shares being on issue.
Upon completion of the buyback, Seven will have more than 296 million shares on issue.
Seven Group shares finished the day up 9 per cent at $7.73.
Mr Stokes owns 207 million shares, and the buyback could lift his share of the company from 67.3 per cent to 70 per cent.
The move is by no means something out of the ordinary for Mr Stokes, with many companies he has been involved with engaging in share buybacks.
James Packer has previously been able to lift his stake in casino operator Crown through buybacks. He was also able to lift his former stake in Consolidated Media Holdings to a majority share through buybacks, after Mr Stokes became a substantial shareholder.
"The buyback takes advantage of the group's strong balance sheet position and signals to investors a willingness to return capital to shareholders while also considering growth opportunities for the group," said JPMorgan analyst Anthony Passe-de Silva.
Last month, Seven issued a profit warning for the financial year, saying it expected earnings to fall between 30-40 per cent, but analysts believe it will be the bottom of the earnings cycle for the group.
Seven, also last month, sold down part of its stake in Agricultural Bank of China to free up capital for further acquisitions.