UAE-based telco Etisalat’s shares climbed after it said that it’s planning to buy back stock valued at as much as $2 billion, according to Bloomberg.
The board of Emirates Telecommunications Group, also known as Etisalat, recommended purchasing up to five percent of the phone operator’s paid-up capital, or 434.8 million shares, the Abu Dhabi-based company said in a statement.
The buyback is intended for canceling or reselling the shares, it said, without providing the terms.
Etisalat, which competes with Dubai-based Du at home, runs operations in countries ranging from Pakistan to Egypt. It has a market capitalisation of $41 billion (AED 151 billion), and based on Monday’s closing share price the buyback will be valued at AED 7.5 billion.
Nishit Lakhotia, head of research at Securities & Investment said that the move is an example of an alternate way to reward shareholders if a firm doesn’t want to increase annual cash dividend.
Etisalat’s consolidated cash and bank balances increased from AED 23.7 billion in 2016 to AED 27.1 billion in 2017, but the company maintained its annual dividend at 80 fils per share.
The shares advanced as much as 4.1 percent, the most in more than than year, in Abu Dhabi. The board’s recommendation is subject to shareholders’ approval at a general assembly meeting scheduled for March 21.
In February, the company has been named the Middle East’s most valuable telecoms brand for the first time in Brand Finance’s Telecoms 300 rankings, after it saw a 40 percent increase to its brand value.