Abu Dhabi's IHC eyes buyback as stock cools after 43,000% jump
Conglomerate plans to execute a total of as much as Dh5 billion over a one-year period
International Holding Company (IHC) has planned its Dh5 billion dirham or $1.4 billion buyback program to revive its share price as the 43,000% rally in its stock cools.
Chief Executive Officer Syed Basar Shueb said in an interview that IHC has 'significant value in the future' and that a stock buyback will help enhance the company's earnings per share. He added that it's also an 'opportunity' for shareholders who want to sell their stock.
The Abu Dhabi conglomerate announced the buyback program earlier this month. Pending approval from shareholders and regulators, it plans to execute a total of as much as Dh5 billion over a one-year period.
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"This is our strategy for rewarding our shareholders who have probably not seen the share price growth in the past year," the CEO said. "It should help boost the price."
It has investments ranging from Elon Musk's Space X to Zambia's Mopani copper mine.
Its stock has stalled and traded in a tight range for nearly two years, but it's still valued at much higher multiples than many prominent global firms. For instance, IHC carries a price to book value of 7 times, versus 1.57 times for Berkshire Hathaway Inc.
The CEO also said his firm is looking to list Daman Insurance, a unit of IHC subsidiary PureHealth Holding PJSC. Initial public offerings have increased significantly in the Gulf region over the past three years, though most of IHC's offerings are sold only to local investors.
Earlier this year, Shueb told Bloomberg that IHC is looking to list subsidiaries 2PointZero, International Technology Holding, and Sirius International Holding. He added that a Sirius unit, Apeiro, won a contract to finance and build a digital platform for Kenya's universal health care system for about $150 million.