ACS: SHARE BUYBACK PROGRAMME EXTENDED (ANÃLISIS BANCO SABADELL)
The company has just announced that its share buyback programme will be extended to a maximum of 6.99% of the share capital (vs. 3.18% previously; +12 M extra shares) equivalent to € 660 M (10% of ACS’ market cap; € 370 M previously). The duration of the programme has also been extended until 31 March 2021 (30 Sep 2020, previously). The shares repurchased might be used for the ordinary dividend in scrip format or even cancelled for reducing the share capital, although the decision is left to the company, meaning that we do not know how much the share capital could be reduced.Positive news although of limited impact, as it does not ensure that the company’s share capital will be reduced by the same amount as that of the buyback plan and that, even if this is the case, the impact would be insignificant. If 100% of the 12 M additional shares is cancelled, the impact would be (i) up to around +2% in EPS’20e; (ii) a +0.5% increase to our T.P. (assuming that the repurchase is made at the current share price; we already assumed the cancellation of the 10% shares included in the first communiqué); and (iii) a +0.1x increase in NFD/EBITDA’20e (to 2.3x including IFRS 16 and factoring). Separately, we understand that the company’s buyback plan should not mean that shares will be purchased directly on the market while the programme lasts, as the company has already signed derivative contracts with a number of financial institutions that entitle it to acquire up to 20 M shares at a price ranging from € 14.00/sh. and € 19.50/sh.
ACS Actividades de Construccion y Servicios is a holding company. Through its subsidiaries, Co.'s activities are divided into the following areas: Construction, engaged in the construction of civil works, and residential and non-residential building construction; industrial services, engaged in the development of applied engineering services, installations and the maintenance of industrial infrastructures in the energy, communications and control systems sectors; services, groups together environmental services, the outsourcing of building maintenance services, logistics and transport services; and concessions, mainly engaged in transport infrastructure concessions.
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