Tenaris completes Third Tranche and commences Fourth Tranche of its USD1.2 Billion Share Buyback Program
Tenaris has completed the third tranche of its USD1.2 billion Share Buyback Program, purchasing 18,080,524 ordinary shares for EUR276.63 million (USD300 million) from May 13, 2024, to June 13, 2024.
As of June 14, 2024, Tenaris holds 34,447,527 ordinary shares in treasury, representing 2.96% of its total issued share capital.
The company has entered a non-discretionary buyback agreement with a primary financial institution for the fourth tranche, which begins on June 17, 2024, and ends by October 31, 2024, aiming to purchase up to USD300 million worth of ordinary shares.
These shares will be cancelled in due course.
- Completion of the third tranche of the USD1.2 billion Share Buyback Program, adding up to EUR276.63 million (USD300 million).
- Tenaris now holds 34,447,527 ordinary shares in treasury, representing 2.96% of the total issued share capital.
- Commencement of the fourth tranche of share buyback, targeting another USD300 million.
- Shares bought back will be cancelled, potentially increasing the value of remaining shares.
- Buyback completion and commencement of new tranche could indicate a lack of better investment opportunities.
- Total expenditure on buyback reached EUR276.63 million (USD300 million), representing a significant outflow of capital.
- The holding in treasury of 34,447,527 ordinary shares reflects a considerable portion of capital not being actively invested.
Insights
Share buyback programs are often seen positively by investors, as they signal that a company has sufficient cash flow and considers its own stock a good investment. Tenaris completing the third tranche and initiating the fourth tranche of its
From a financial perspective, this can improve earnings per share (EPS) by reducing the number of outstanding shares. Since shares are bought back and held in treasury, this can increase the value of remaining shares, benefiting current shareholders. Moreover, the transparency in the execution by involving a primary financial institution ensures adherence to regulatory compliance, which is important to mitigate risks associated with share manipulation allegations.
However, it's important to consider that buybacks can also be a sign that the company lacks better growth opportunities to invest in, which could indicate a lack of innovation or expansion plans. This might be a red flag for growth-oriented investors.
In the short term, this action is likely to bolster the stock price due to reduced supply. In the long term, the impact depends on how well Tenaris utilizes its remaining capital for growth and operational efficiency.
Considering industry norms, the buyback aligns with common practices among financially strong firms within the energy and manufacturing sectors, where Tenaris operates.
The market impact of Tenaris's buyback program can be significant. By reducing the number of shares available on the market, buybacks can create upward pressure on the stock price. Investors often see this as a signal of confidence from the company's management in its own financial health and future prospects.
Looking at the broader macro-economic factors, the timing of the buyback during a volatile market phase might stabilize Tenaris's stock price. This move can attract both short-term traders looking for quick capital gains and long-term investors hoping for improved EPS and dividend yields.
However, it’s essential to recognize potential drawbacks. Relying heavily on buybacks might mask underlying operational issues or stagnant revenue growth. Investors should look at comprehensive financial statements and future earnings guidance to get a clearer picture of the company's health.
This buyback program also aligns with recent trends in the energy sector, where companies prefer returning value to shareholders through buybacks and dividends, rather than pursuing aggressive expansion, especially in uncertain economic climates.
LUXEMBOURG, June 14, 2024 (GLOBE NEWSWIRE) -- Tenaris S.A. (NYSE and Mexico: TS and EXM Italy: TEN) (“Tenaris”) announced today the completion of the third tranche and the commencement of the fourth tranche of its USD1.2 billion Share Buyback Program announced on November 1, 2023 (the “Program”).
During the third tranche, which ran from May 13, 2024, to (and including) June 13, 2024, the Company purchased a total of 18,080,524 ordinary shares for a total consideration of EUR276,630,414, or USD300 million.
As of June 14, 2024, the Company held in treasury 34,447,527 ordinary shares (including 16,367,003 ordinary shares bought in the second tranche), equal to
On June 14, 2024, Tenaris entered into a non-discretionary buyback agreement with a primary financial institution (the “Bank”) for the execution of the fourth tranche of the Program, covering up to the remainder amount of the Program. This fourth tranche shall start on June 17, 2024, and end no later than October 31, 2024, and will cover an amount of up to USD300 million.
The Bank will make its trading decisions concerning the timing of the purchases of Tenaris’s ordinary shares independently of and uninfluenced by Tenaris and will act in compliance with applicable rules and regulations, including the Market Abuse Regulation 596/2014 and the Commission Delegated Regulation (EU) 2016/1052 (the “Regulations”). Under the buyback agreement, purchases of shares may continue during any closed periods of Tenaris in accordance with the Regulations.
Ordinary shares purchased under the Program will be cancelled in due course.
Any buyback of ordinary shares in relation to this announcement will be carried out under the authority granted by the general meeting of shareholders held on June 2, 2020, up to a maximum of
Some of the statements contained in this press release are “forward-looking statements”. Forward-looking statements are based on management’s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to future oil and gas prices and their impact on investment programs by oil and gas companies.
Tenaris is a leading global supplier of steel tubes and related services for the world’s energy industry and certain other industrial applications.
Giovanni Sardagna
Tenaris
1-888-300-5432
www.tenaris.com
FAQ
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