Millicom (Tigo) share repurchase activity
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Insights
The recent share repurchase activity conducted by Millicom represents a strategic financial decision that can have multiple impacts on the company's financial health and market perception. Share buybacks are often viewed as a signal of management's confidence in the company's future prospects and an indication that the firm believes its shares are undervalued. By reducing the number of shares outstanding, repurchases can potentially increase earnings per share (EPS), a key metric for investors and analysts when assessing a company's profitability.
It is also important to consider the liquidity aspect. The repurchase of shares injects liquidity into the market, providing an exit option for shareholders. However, this must be balanced against the use of cash for buybacks as opposed to other investments or debt reduction. The long-term benefits versus immediate shareholder returns should be evaluated, especially in industries where capital expenditure is crucial for growth.
Moreover, the execution of this repurchase under the 'Safe Harbour Regulation' ensures compliance with market abuse regulations, providing a layer of trust and transparency in the transaction. Investors and stakeholders should monitor the company's leverage and cash flow statements in subsequent quarters to assess the impact of these buybacks on the company's capital structure and liquidity position.
From a market perspective, Millicom's share repurchase activity could be perceived as a positive move, potentially leading to a favorable reaction in the stock market. The repurchase program indicates that the company is actively managing its capital allocation and is focused on creating shareholder value. However, the market response will also depend on the broader economic environment, industry trends and investor sentiment.
Investors often look at share buyback programs as a sign that a company has excess cash that it can return to shareholders, which can be particularly appealing in uncertain economic times. In the case of Millicom, the repurchase of Swedish Depository Receipts (SDRs) specifically targets the Swedish market, which could suggest a strategic focus on consolidating its investor base in that region.
It is also vital to analyze the average price paid for the SDRs compared to the current market price and historical performance. This can provide insights into the timing of the buyback and whether the company has managed to execute the repurchase at an opportune moment, potentially maximizing the benefit for remaining shareholders.
Legally, the adherence to Article 5 of the Market Abuse Regulation (MAR) and the Commission Delegated Regulation No 2016/1052, also known as the 'Safe Harbour Regulation', is a crucial element of Millicom's share repurchase program. These regulations set forth the conditions for buybacks to occur without constituting market abuse, such as insider trading or market manipulation.
The 'Safe Harbour Regulation' provides specific rules regarding the volume, timing, price and transparency of share buybacks. For instance, the regulation stipulates that the volume of shares repurchased should not exceed 25% of the average daily volume of the shares on the trading venue where the purchase is carried out. By disclosing detailed transaction information, Millicom is demonstrating compliance with these regulatory requirements, which is essential for maintaining the integrity of the market and the trust of investors and regulators.
For stakeholders, the legal adherence reassures that the share repurchase program is being executed within the bounds of the law, minimizing the risk of legal repercussions that could arise from non-compliance and potentially affect the company's reputation and financial standing.
Millicom (Tigo) share repurchase activity
Luxembourg, February 23, 2024 – Pursuant to the share repurchase program announced on December 15, 2023, Millicom repurchased 36,250 of its Swedish Depository Receipts (SDRs) between February 19, 2024 and February 23, 2024, as detailed in the table below.
| Trade Date | Number of SDRs repurchased | Daily average price paid* (SEK) | Daily repurchase amount* (SEK) |
| 02/19/2024 | 7,250 | 165.9824 | 1,203,372 |
| 02/20/2024 | 7,250 | 164.3210 | 1,191,327 |
| 02/21/2024 | 7,250 | 163.6771 | 1,186,659 |
| 02/22/2024 | 7,250 | 164.1440 | 1,190,044 |
| 02/23/2024 | 7,250 | 163.1459 | 1,182,808 |
* Excluding commissions
All purchases were carried out on Nasdaq Stockholm by Citigroup Global Markets Limited on behalf of Millicom. Following the purchases, Millicom holds 1,631,620 treasury shares as of February 23, 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 September 30, 2023, Millicom, including its Honduras Joint Venture, employed approximately 19,000 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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What regulations is the repurchase program being executed consistent with?
