Megawide Corp. has joined the growing list of Philippine listed firms initiating share buyback programs, announcing a P2 billion plan to repurchase its common shares on the open market.
The company’s board approved the move, citing a belief that current market prices undervalue the firm’s shares and expressing intent to enhance shareholder value through the buyback.
The program, set for a 24-month term starting immediately, will utilize Megawide’s internally generated funds to purchase shares via the Philippine Stock Exchange trading platform. Shares bought back will be recorded as treasury shares, temporarily reducing the number of outstanding shares and potentially increasing earnings per share (EPS).
As of August 31, Megawide’s authorized capital stock stands at P45.7 billion, comprising over 45.6 billion common shares and 6 billion preferred shares. Currently, the company has roughly 32.56 billion common shares and 6 billion preferred shares issued and outstanding, with approximately 1.19 billion treasury shares. The exact impact on the capital structure will depend on the volume and price of shares repurchased during the program.
The buyback appears as a strategic signal of management’s confidence in the company’s fundamentals amid market undervaluation. By reducing share float, the program could improve key financial metrics, support share price stability, and reward long-term shareholders. However, the company will likely balance repurchases with ongoing capital needs, particularly in the capital-intensive construction sector.
-0-
