The shares of Dangote Cement Plc gained 16.95 per cent last week as investors flocked to the stock following the announcement of the commencement of its share buyback programme.
Precisely, the share price rose from N209.50 to N245.00 per share last week.
The cement manufacturing firm had last Monday said it would execute the share buyback under the approval granted by its shareholders at an extraordinary general meeting (EGM) which held on January 21, 2020, within the framework provided by the Securities and Exchange Commission (SEC) as well as the NSE.
According to the company, the exercise would be done in the open market on December 30, and would end the following day or when the entire target number of shares are repurchased, “whichever is earlier.”
Dangote Cement had said the number of shares to be repurchased under the programme would not exceed 10 per cent of Dangote Cement Plc’s issued capital, starting with a first tranche of 85.2 million shares of 50 kobo each, or 0.5 per cent of the total in issue.
“The programme will be effected in tranches, with Tranche I being executed by the appointed stockbrokers on the company’s behalf.
“The company through its appointed stockbrokers will at its discretion purchase Dangote Cement shares in the open market over the duration of Tranche I, subject to prevailing market conditions and under the current daily trading rules of The NSE,” Dangote Cement said.
It explained that the shares being bought back by the company would be held as treasury shares, and may subsequently be cancelled.
“Execution of this Tranche I is not expected to have any material impact on the company’s financial position. Dangote Cement shareholders seeking to participate in Tranche I of the share buyback programme are hereby advised to contact their stockbrokers or any other independent professional adviser registered as a capital market operator by the SEC for further guidance on submission of trades on The NSE’s trading platform,” it noted.
Dangote Cement had explained that the share buyback was intended to increase long term shareholder value, improve its balance sheet efficiency, enhance earnings and yields to its various shareholders.