Dangote Cement Plc Dangote Cement Plc said it would purchase 170 million units of its common stock from the open market in the latest phase of the share buyback scheme it launched in December 2020, a move hoped to drive its share price given that fewer shares will be available for trade on completion of the exercise.
“The shares being repurchased by the company under the share buy-back programme will be held as treasury shares and may subsequently be cancelled,” the cement maker said in a regulatory filing on Wednesday.
“Execution of this Tranche II is not expected to have any material impact on the company’s financial position.”
Shares in Dangote Cement jumped 6.18 per cent in Lagos on Wednesday following the disclosure.
Nigeria’s biggest company by market capitalisation is looking buy back 10 per cent (1.7 billion units) of its outstanding shares as management sees its current valuation as being lower than it should be and is banking on the repurchase to drive up price.
It repurchased 0.24 per cent (40.2 million units) of its ordinary shares for N9.8 billion in the first tranche at the end of 2020, having set out to acquire 0.5 per cent.
Dangote Cement first declared the ambition two years ago before the pandemic stood in its way and now expects the second phase to run from 19th to 20th January. Meristem Stockbrokers Limited and Vetiva Securities are joint stockbrokers for the transaction. Majority-owned by Africa’s richest man Aliko Dangote , the market value of the company stands at N4.7 trillion as of Wednesday.