Tycoon Andrew Tan-led property developer Megaworld Corp. has earmarked P5 billion to pick up its own shares in the bearish stock market.
Megaworld’s board has approved a buyback program of up to P5 billion for a 24-month period, the company disclosed to the Philippine Stock Exchange on Friday.
“The board believes that current market prices do not reflect the true value of the company’s shares and seeks to enhance shareholder value through a share buyback program,” the company said.
Valued at P108.97 billion
The buyback program will be financed with internally generated funds, Megaworld said. Shares purchased under the buyback program will be booked as treasury shares of the company. These can be reissued in the future at more favorable prices, proceeds from which can fund expansion programs.
Megaworld is currently valued by the stock market at about P108.97 billion. Shares prices closed on Friday at P3.40 per share, about 48 percent lower than its 52-week high of P6.54 per share.
Terms of buying
As of end-February, Megaworld has an authorized capital stock of P46.14 billion consisting of 40.14 billion common shares with par value of P1 per share and six billion voting preferred shares with par value of one centavo each. Of these, 32.24 billion common shares and six billion preferred shares are issued and outstanding.To date, Megaworld has about 129.92 million of its own shares lodged in the treasury.
“The actual number of shares to be repurchased and the company’s capital structure after the buyback program cannot as yet to be determined as these will depend on the total buyback price of the shares,” the disclosure said.
The terms of the buyback program will be subject to review of management from time to time and will be implemented in a manner that is beneficial to the company, the disclosure said.