Rightmove has announced the start of a two-month share repurchase programme - a way of buying its own stock back from shareholders, giving investors a one-off return.
The announcement was made during yesterday’s first day of trading on the London stock market since the festive break.
The repurchase programme runs until February 27.
The definition of a repurchase programme is that the company buys shares directly from the market or offers its shareholders an option of selling back at a fixed price. The effect is to reduce the number of outstanding shares, which increases both the demand for the remaining shares and therefore can inflate the price.
The company then either ‘retires’ the repurchased shares, or can in some circumstances re-issue them for sale.
Here’s the announcement the portal company made to investors:
Rightmove announces that it has commenced an irrevocable, non-discretionary programme to purchase shares on its own behalf, for cancellation, during its closed period.
The programme commences from the start of business on 2 January 2020 until the close of business on 27 February 2020.
Any acquisitions will be effected within certain pre-set parameters, and in accordance with both the Company’s general authority to repurchase shares, the EU Market Abuse Regulation, and Chapter 12 of the Listing Rules which requires the maximum price paid to be limited to no more than 105 per cent of the average middle market closing price of the Company’s shares for the 5 dealing days preceding the date of purchase. The Company confirms that it currently has no unpublished price sensitive information.
The maximum pecuniary amount allocated to the buy-back programme is £25,000,000 and the maximum number of shares that will be purchased is 3,846,153, for the purpose of shareholder returns.