InterContinental Hotels Group PLC Announces Transaction in Own Shares - March 7
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Share buybacks, such as the one executed by the Company, are strategic financial transactions with direct implications for shareholder value and market perception. By repurchasing shares, the Company is effectively reducing the number of shares available in the market, which can lead to an increase in earnings per share (EPS) due to the reduced share count. This action typically signals management's confidence in the company's financial health and future prospects, often resulting in a positive reaction in the stock price.
Moreover, the share buyback was conducted through a well-known investment firm, Goldman Sachs International, which adds a layer of credibility to the transaction. The cancellation of the purchased shares will further consolidate share value. However, it is essential to consider the opportunity cost of the buyback; funds used for this purpose are not being invested in business expansion or other potentially value-adding activities. Investors should assess the company's long-term strategy to determine if the buyback aligns with sustainable growth objectives.
The buyback announcement provides insights into the Company's capital allocation strategy. By analyzing the timing and price range of the share purchases, one can infer market conditions and the company's assessment of its intrinsic value. The average price paid per share, compared to historical stock performance, can indicate whether the company believes its stock is undervalued.
It is also noteworthy to consider the broader market implications. Share buybacks can support stock market performance by providing a floor for the stock price. They often occur during market downturns when companies want to stabilize their stock price or take advantage of lower valuations. The disclosed information regarding the volume and prices on different exchanges could help in understanding liquidity and price variations across trading venues.
From an economic perspective, share buybacks can be reflective of broader economic trends. In periods of economic growth, companies may have excess cash that they choose to return to shareholders through buybacks. Conversely, during economic downturns, buybacks could be a tool to manage market sentiment and shareholder value amidst declining profits.
The decision to buy back shares also has implications for the company's capital structure. It can affect leverage ratios and the cost of capital. A reduction in equity can lead to a higher return on equity (ROE), provided the cost of debt does not outweigh the earnings yield of the repurchased equity. The economic context and interest rate environment are crucial factors in assessing the timing and impact of such financial decisions.
Purchase of own shares
LONDON, UK / ACCESSWIRE / March 7, 2024 / The Company announces that on 06 March 2024 it purchased the following number of its ordinary shares of 20340/399 pence each through Goldman Sachs International ("GSI") on the London Stock Exchange in accordance with the authority granted by shareholders at the Company's Annual General Meeting on 5 May 2023 (the "Purchase"). The Purchase was effected pursuant to instructions issued by the Company on 20 February 2024, as announced on 20 February 2024.
| Date of purchase: | 06 March 2024 |
| Aggregate number of ordinary shares purchased: | 159,621 |
| Lowest price paid per share: | £ 83.0200 |
| Highest price paid per share: | £ 83.8400 |
| Average price paid per share: | £ 83.4217 |
The Company intends to cancel the purchased shares.
Following the above transaction, the Company has 164,374,035 ordinary shares in issue (excluding 7,006,782 held in treasury).
A full breakdown of the individual purchases by GSI is included below.
http://www.rns-pdf.londonstockexchange.com/rns/9029F_1-2024-3-6.pdf
Enquiries to:
InterContinental Hotels Group PLC:
Investor Relations: Stuart Ford (+44 (0)7823 828 739); Aleksandar Milenkovic (+44 (0)7469 905 720);
Joe Simpson (+44 (0)7976 862 072)
Media Relations: Mike Ward (+44 (0)7795 257 407)
Schedule of Purchases
Shares purchased: 159,621 (ISIN: GB00BHJYC057)
Date of purchases: 06 March 2024
Investment firm: GSI
Aggregated information:
London Stock Exchange | Cboe BXE | Cboe CXE | Turquoise | |
Number of ordinary shares purchased | 92,000 | 26,275 | 30,640 | 10,706 |
Highest price paid (per ordinary share) | £ 83.8400 | £ 83.8400 | £ 83.7000 | £ 83.8200 |
Lowest price paid (per ordinary share) | £ 83.0200 | £ 83.0400 | £ 83.0200 | £ 83.0400 |
Volume weighted average price paid(per ordinary share) | £ 83.4260 | £ 83.4112 | £ 83.4196 | £ 83.4160 |
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
SOURCE: InterContinental Hotels Group PLC
View the original press release on accesswire.com
FAQ
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