Romania's Fondul Proprietatea to launch new buyback offer for 200 mln shares

Fondul Proprietatea, the biggest investment fund in Romania, whose shares are trading on the Bucharest Stock Exchange and GDRs on the London Stock Exchange, will launch a new buyback offer for a total of 200 million own shares (including GDRs).

The fund’s manager, Franklin Templeton Investment Management has hired Romanian brokerage firm Swiss Capital and international broker Auerbach Grayson to manage the offer. The terms of the offer, including the price, must first be approved by the Romanian Financial Supervisory Authority (ASF).

Fondul Proprietatea’s shares were trading on Tuesday, January 7, at a price of RON 1.2 per share. At this price, the value of the shares targeted by the buyback offer is about EUR 50 million. However, the previous buyback offers were all carried out at a premium to the market price. At the end of November 2019, Fondul Proprietatea’s net asset value (NAV) per share was RON 1.5725, which means that the shares are still trading at a discount of over 23% compared to the NAV per share.

At the beginning of this year, Fondul Proprietatea started its 11th share buyback program, which targets the repurchase of 800 million own shares.

Share buybacks financed from asset sales have been one of the main tools used by the fund manager to reduce the discount at which the shares are trading and to bring higher returns to shareholders.

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