Date: Friday 22 Oct 2010
Irish housebuilder Abbey plans to buy back up to 15% of its shares.
Abbey had €51.8m in the bank and €52.1m in financial instruments at the end of April 2010. These cash assets are almost equal to Abbey’s market value. At the current share price of €4.40, 15% of the company will cost around €17m.
The last time Abbey repurchased shares was April 2008. Management believes that a buy back will enhance earnings per share and help market liquidity. It is also a tax efficient method of returning cash to shareholders. How many shares are bought back depends on market conditions.
The Irish Takeover Panel has granted a bid waiver to 41.28% shareholder Gallagher Holdings. It will not be forced to bid if its percentage stake is increased by buy backs. Gallagher is unlikely to sell any shares. That means that its stake could rise to 48.76%.
Shareholder approval will be sought at a general meeting in County Meath on 17 November.
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