Kingspan cancels buy-back

KINGSPAN has cancelled its current share buy-back programme which has cost the company €7.9 million and resulted in a loss of €2.17m as share values have fallen by 27.5%.

Since September 11 the company has bought 3.95 million shares at €2 each, but the shares have fallen to year lows of €1.45.

The company has now stopped buying bargain price shares on the instructions of the Irish Takeover Panel, because it has secured the maximum number of shares it can without triggering a full bid by the directors for the company.

However, it is not expected that any privatisation bid is in the offing, according to Merrion Capital analyst John Mattimoe.

“As Kingspan’s directors own more than 30% of the group, the company needs a waiver from Panel rules on changes in ownership stakes above 30% to allow a share buy-back,” said Mr Mattimoe.

“We understand that the Panel now requires the company to also get approval from shareholders, excluding directors, for this waiver in a general meeting.

“The company can now either hold an EGM, which would take a number of weeks and incur costs, or wait for the next AGM, in May 2003,to get this approval.”

The 3.95 million shares bought back have not been cancelled but are being held as treasury shares. This is partly because Kingspan would have to pay stamp duty on any new shares it issued in the future, whereas putting treasury shares onto the market do not incur this penalty.