Sagicor goes after share repurchase

Sagicor Financial Corporation is seeking to buy back at least 3 million of the ordinary shares currently held by shareholders, in an apparent bid to boost the company’s share price.

It hinted that it took the decision because the share price of the billion-dollar regional financial services group did not represent the investment’s true intrinsic value.

According to a statement published today, “Sagicor believes that the underlying value of the company may not be accurately reflected at times in the market price of the common shares, and that purchasing its own shares represents an attractive opportunity that is in the best interests of Sagicor and its shareholders, as well as providing liquidity for its shareholders who may wish to dispose of their shares.”

The regional insurance giant which was last December purchased by Alignvest of Canada in a US $536 million deal, announced it would begin the process of repurchasing the stock which were acquired by some shareholders.

In the notice, Sagicor told investors its board of directors had “authorised a share buyback programme that will allow Sagicor to repurchase up to 3,000,000 of Sagicor’s common shares”, and the proposal had received the green light from the Toronto Stock Exchange where it is listed.

According to the pan-Caribbean insurer, the planned buy back represented 2.01 per cent of the issued and outstanding shares which total 149.16 million, and the repurchase would take place on the open market as well as “by other means as may be permitted by [the Toronto Stock Exchange] rules and applicable securities laws”.

In addition, Sagicor disclosed that it “had entered into an automatic share purchase plan in relation to purchases made” in connection with the bid, to allow it to purchase the shares in circumstances where it would “ordinarily not be permitted to purchase shares due to regulatory restrictions and customary self-imposed blackout periods”.

According to the statement issued by the financial services conglomerate that originally started here as the Barbados Mutual almost 180 years ago: “The actual number of common shares that may be purchased under the NCIB (normal course issuer bid) and the timing of any such purchases will be determined by Sagicor.”