The basic idea being to floata shell company in London, raise some cash, then use the cash and the float to reverse in some large but foreign and privately owned resource company.
But if acompany keeps growing free cash flow and uses part of the cash to keep shrinking the float, why would not such acompany outperform an equivalent dividend payer?
So to some extent we can view an insurance company as actually a large investment fund: investing that float for however long the company gets to keep it.
It would apparently prevent companies with less than 25% of their shares in free float from making a cash-and-stock bid for acompany domiciled in Luxembourg.
Another trend that will give ENI momentum is the Italian government, which owns 35% of the company, and which is serious about continuing to reduce its stake, with a sale or float of 5% of its stake set for the end of the second half of this year.
One example often brought up is Links Island, a maritime company whose stock the Singapore Exchange said had been "cornered" (reducing the free float below the required 10% minimum) during a period when the value of the stock rose fourfold in four months after its IPO in April 2000.