(Bloomberg) -- Etisalat, the biggest telecommunications company in the United Arab Emirates, is seeking to buy back stock valued at as much as $2 billion. The shares climbed.
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 capitalization of about 151 billion dirhams ($41 billion), and based on Monday's closing share price the buyback will be valued at 7.5 billion dirhams.
“This is an alternate way to reward shareholders if one doesn't want to increase annual cash dividend," said Nishit Lakhotia, head of research at Securities & Investment Co. “Etisalat's consolidated cash and bank balances increased from 23.7 billion dirhams in 2016 to 27.1 billion dirhams 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 on Tuesday. They closed 2.6 percent higher, the biggest advance since Dec. 28.
To contact the reporter on this story: Filipe Pacheco in Dubai at fpacheco4@bloomberg.net.
To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Shaji Mathew, Stefania Bianchi
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