Beazley Announce 5% Share BuyBack

by Stewart Douglas

Story link: Beazley Announce 5% Share BuyBack

Insurance group Beazley have today announced that they have initiated an aggressive capital equity buyback process which will see it re-acquire around 5% of its ordinary share capital, through its broker division Numis Securities, over the course of the next few months.

The move will see the company attempt to reacquire a stake in itself in order to cancel that issued share capital, with the overall effect of increasing share potency and narrowing management diversification.

The company will strive to buy back shares through its subsidiary broker Numis Securities, with a view to increasing its private management share and improving remaining shareholder returns.

The move will see Beazley write off 5% of its issued share capital, valued at around £30 million on close of trade today. The move received the backing of a majority of shareholders in passing its special resolution, which enabled the company to reacquire existing share capital.

Speaking today on the move a spokesperson from Beazley said that they were happy to be undertaking the buyback, as a way of effectively managing the financing of the business whilst matching the strategy of enhancing shareholder returns. It is thought that the company may retain the shares with a view to a possible reissue later down the line in order to fund certain other investments.

Whilst the move will require the company to negotiate with shareholders, it is not expected that they will have any difficulties in recouping their outstanding issued capital, particularly given certain pre-emption clauses embedded in the company constitution.

The shares that will be repurchased are to be temporarily held in trust on behalf of the company, with a view to redistribution at a later date in order to take account of fluctuations in capital value.