(Updating to add background, share price)
LONDON (Thomson Financial) - Vodafone Group Plc. unveiled a surprise 1
billion pound share buyback programme Wednesday, saying that its current share
price undervalues the company following a sales warning on Tuesday.
Vodafone shares dropped nearly 14 percent to 129 pence on Tuesday in
reaction to the mobile phone group's disappointing trading statement.
"The Board of Vodafone Group has considered the market reaction to the
Group's Interim Management Statement, issued on 22 July 2008, and has decided to
introduce a 1 billion pound share repurchase programme with immediate effect.
This action reflects the board's belief that the share price significantly
undervalues Vodafone".
Shares in the company rose on the news, climbing 2.36 percent to 132 pence
at 8:54 a.m.
The world's largest mobile phone group by revenue will seek shareholder
approval for the buy-back at the group's annual meeting on July 29. It will pay
up to 105 percent of the shares' average closing price in the five days before
the buyback.
Vodafone said Tuesday that its full-year revenue will come in at the lower
end of its target of 39.8 billion to 40.7 billion due to economic weakness,
indicating that the company is not immune to a downturn in the economy.
TFN.newsdesk@thomson.com
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