Millicom (Tigo) share repurchase activity
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Insights
The recent share repurchase activity by Millicom (Tigo) indicates a strategic move to manage capital allocation and potentially signal confidence in the company's future prospects to the market. Share repurchases can be a double-edged sword; on one hand, they can improve financial ratios such as earnings per share (EPS) by reducing the number of shares outstanding, which might lead to a higher stock price. On the other hand, they utilize cash reserves that could have been invested in growth opportunities or used to pay down debt.
Considering the repurchase was made under the Safe Harbour Regulation, it suggests compliance with strict regulatory requirements, aimed at preventing market manipulation. The repurchase activity was executed at a time when the company holds a substantial number of treasury shares, which could be used for employee compensation plans or future acquisitions. Investors should monitor whether these repurchases will continue and how they align with the company's long-term strategy and capital deployment plans.
From a financial perspective, the repurchase of Swedish Depository Receipts (SDRs) by Millicom may reflect the management's belief that the stock is undervalued. The average price paid per SDR over the course of the repurchase period shows a slight variation, indicating a stable market perception during those days. It's important to analyze the repurchase in the context of the company's overall financial health, including its cash flow statements and balance sheets.
Investors should consider the impact of the repurchase on the company's liquidity and leverage ratios. The financial opportunity cost of this buyback program must be weighed against potential alternative uses of capital, such as investment in new technology or market expansion, especially in the highly competitive telecommunications industry. Long-term effects on shareholder value will depend on how these repurchased shares are utilized moving forward.
The execution of a share repurchase program is often scrutinized for its implications on corporate governance. In Millicom's case, repurchasing shares could be perceived as a move to consolidate voting power or as a tactic to support the share price. The transparency provided in the press release, including a detailed breakdown of transactions, adheres to good governance practices and regulatory compliance, fostering trust among stakeholders.
Shareholders should evaluate the alignment of this repurchase with the company's stated objectives and the interests of all shareholders. The repurchase activity should be seen in the broader context of the company's capital distribution policy, which includes dividends and other forms of shareholder returns. Understanding the board's rationale behind the timing and scale of the buyback could provide insights into the company's operational performance and strategic priorities.
Millicom (Tigo) share repurchase activity
Luxembourg, April 5, 2024 – Pursuant to the share repurchase program announced on December 15, 2023, Millicom repurchased 27,945 of its Swedish Depository Receipts (SDRs) between April 2, 2024 and April 5, 2024, as detailed in the table below.
| Trade Date | Number of SDRs repurchased | Daily average price paid* (SEK) | Daily repurchase amount* (SEK) |
| 04/02/2024 | 4,895 | 217.8993 | 1,066,617 |
| 04/03/2024 | 7,092 | 218.4908 | 1,549,537 |
| 04/04/2024 | 7,000 | 218.4171 | 1,528,920 |
| 04/05/2024 | 8,958 | 215.3031 | 1,928,685 |
* Excluding commissions
All purchases were carried out on Nasdaq Stockholm by Citigroup Global Markets Limited on behalf of Millicom. Following the purchases, Millicom holds 733,850 treasury shares as of April 5, 2024. The total number of shares outstanding in Millicom is 172,096,305.
The repurchase program is being executed consistent with the provisions of Article 5 of MAR and the Commission Delegated Regulation No 2016/1052 (“Safe Harbour Regulation”). A full breakdown of the transactions is attached to this press release. For information about all transactions carried out under the repurchase program, refer to Nasdaq Stockholm’s website: http://www.nasdaqomx.com/transactions/markets/nordic/corporate-actions/stockholm/repurchases-of-own-shares
For further information, please contact:
| Press: Sofía Corral, Communications Director press@millicom.com | Investors: Michel Morin, VP Investor Relations investors@millicom.com |
About Millicom
Millicom (NASDAQ U.S.: TIGO, Nasdaq Stockholm: TIGO_SDB) is a leading provider of fixed and mobile telecommunications services in Latin America. Through our TIGO® and Tigo Business® brands, we provide a wide range of digital services and products, including TIGO Money for mobile financial services, TIGO Sports for local entertainment, TIGO ONEtv for pay TV, high-speed data, voice, and business-to-business solutions such as cloud and security. As of December 31, 2023, Millicom, including its Honduras Joint Venture, employed approximately 16,500 people and provided mobile and fiber-cable services through its digital highways to more than 45 million customers, with a fiber-cable footprint over 13 million homes passed. Founded in 1990, Millicom International Cellular S.A. is headquartered in Luxembourg.
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FAQ
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