Cape Town – South African pharmaceutical group Aspen Pharmacare, co-founded by billionaire Stephen Saad, has returned approximately R4.4 billion to shareholders through a share buyback programme, as the company steps up efforts to unlock value for investors.
According to Billionaires.Africa, Aspen spent R2.43 billion buying back 14.99 million of its own shares on the Johannesburg Stock Exchange (JSE) on November 2 and 3.
The shares were purchased at an average price of R162.01 each, with prices ranging between R161.33 and R164.89, according to a company announcement released on November 5.
The latest transaction brings the total number of shares repurchased under the programme to 28.32 million, representing approximately 6.3% of Aspen’s issued share capital.
In its JSE SENS announcement, Aspen said the repurchases reflected its “disciplined capital allocation approach and confidence in the Company’s long-term value creation prospects”.
Management’s confidence
The company still has authority to repurchase a further 60.93 million shares, representing approximately 13.7% of its issued share capital.
The buyback programme follows Aspen’s disposal of the European commercialisation rights and related intellectual property for its women’s health product, Ovestin, to Ennogen Healthcare International for €197 million (approximately R3.7 billion).
Aspen confirmed on November 5 that it had received the proceeds from the transaction on November 3.
According to Financial Mail, the R2.43-billion share repurchase coincided with the completion of the Ovestin transaction, demonstrating management’s confidence in the company’s valuation despite a strong share price recovery.
Daily Investor reported that the buybacks signal a shift in Aspen’s capital allocation strategy, with the group increasingly focused on returning capital to shareholders after selling assets and reducing debt.
Acquisition-led strategy
Speaking on BusinessDayTV, Allweather Capital’s Nick van Rensburg said: “It seems very much like returning capital to shareholders is the number one focus now.”
He added that Aspen appeared to be moving away from the acquisition-led strategy that had characterised its earlier years, towards rationalising its business and unlocking shareholder value.
Meanwhile, Aspen’s shares have gained approximately 74% over the past year, lifting the value of Saad’s 13% stake in the company to about R9.94 billion, according to Billionaires.Africa.
Saad co-founded Aspen in 1997 and has since built it into a major global supplier of anaesthetics, injectables and generic medicines.
The company said the latest share repurchases were funded from available cash resources and would reduce its cash balances by the amount spent, but would have no material impact on its financial information.
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Compiled by Betha Madhomu
