Shares of Dangote Cement was highly sought after on Wednesday, which led to a 10 percent— the biggest in five months, as investors interest in the company’s stocks pushed the price to N230.40, its highest in 28 months.
The company’s shares last hit that note on August 24, 2018, when it shares sold at N235.
The high demand comes just one week to the cement company’s planned buyback of its shares, to improve shareholder value.
Dangote Cement had on Monday filed a notice with the Nigerian Stock Exchange (NSE) that it intends to reclaim 10 percent of its total 17,040,507,404 issued shares of 50 kobo each.
The company intends to implement its buyback plan in two tranches. It will be acquiring 85,202,537 shares which represent 0.5 percent of the company’s entire issued shares in the first tranche.
READ ALSO: NIPC To Unveil Single Window Investors Portal In Q1, 2021
The purchase to be handled by the company’s appointed stockbrokers is projected to run for two trading days or “when the entire Tranche Size has been purchased; whichever is earlier.”
“The Share Buy-Back Programme will be executed under the approval granted by the Company’s shareholders at the Extraordinary General Meeting of DCP which held on 21 January, 2020, within the framework provided under Rule 398 (3)(xiv) of the Securities and Exchange Commission’s (“SEC”) Rules and Regulations (as applicable) and in accordance with Rule 13.18 of the Rulebook of the Nigerian Stock Exchange,” the statement read.
“Based on the aforementioned shareholders’ approval, the number of shares to be repurchased under the Share Buy-Back Programme will not exceed 10% of DCP’s issued capital.”
According to the company, the shares being bought back will be held as treasury shares, and may be cancelled afterwards.
“Dangote Cement shareholders seeking to participate in Tranche I of the Share Buy-Back 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, ” the statement read.
“DCP will provide weekly updates on the progress of Tranche I of the Programme on its website over the duration of this tranche. The Company will continue to monitor the evolving business environment and market conditions, in making decisions on further tranches of the Share Buy-Back Programme.”
The company had stated that the share repurchase would boost long-term shareholder value, a valuable tool for managing the capital structure and balance sheet efficiency, window to return cash to shareholders.
