How serious is this buyback offer? - GTL !

The Board of GTL (the erstwhile Global Telesystems) today approved the following:

GTL Ltd has informed BSE that the Board of Directors of the Company at its meeting held on April 25, 2007, inter alia, has recommended following:

1. Buyback of Company's shares at Rs 300 per share.
2. Set aside an amount of Rs 275 crores for the buyback.
3. The buyback is subject to the approval of shareholders and regulatory authorities.

However there are the few questions that come to one's mind -

1). How serious is this offer given that the current market price is only Rs.185, a good 40% below the offer price?

2). If the company wished, it could have simply bought back shares from the open market, I think SEBI allows companies to buyback 5% of their equity from the secondary market in a year without triggering the open offer.

3). If at all the buyback offer is serious, why did the share price did not witness a substantial increase today?

4). In fact, the scrip witnessed huge volumes today, six times more than the daily average over the last 2 weeks and more importantly witnessed heavy supply at higher levels which resulted in the share price falling down from a high of around Rs.193 to close at Rs.185.

GTL has a poor track-record and was reported to be one of the Ketan Parekh's favorite stocks in 2000-01. After the crash it had witnessed close to 98% price erosion....from a high of Rs.3,500 it fell to as a low as Rs.65-70 per share. And, I think this release on the BSE is completely non-serious. The company is not likely to buy 9.1 million shares @ Rs.300...and spend Rs.275 crore...when it can easily buy the same from the market at less than Rs.200 crore.

Investors looking to invest into this company should tread caution....