Saputo Inc. Announces Normal Course Issuer Bid
MONTRÉAL, Recently, Saputo Inc. (TSX: SAP) made an important announcement regarding its normal course issuer bid (NCIB), indicating that the Toronto Stock Exchange (TSX) has approved its intention to purchase up to 2% of its issued and outstanding common shares. This initiative highlights the Company’s dedication to delivering value to its shareholders while still having the ability to invest in growth opportunities.
Details of the NCIB
As part of the NCIB, Saputo is authorized to buy back for cancellation up to 8,487,169 common shares, which is approximately 2% of the 424,358,459 shares that were issued and outstanding as of a recent date. These shares will be acquired on the open market via the TSX, other Canadian trading platforms, or through other allowable means outlined by the relevant securities regulatory authority. This might include exempt offers or block purchases not conducted on an exchange.
Duration and Purchasing Limits
This buyback program is set to run for a year, kicking off on a date soon and concluding no later than one year after that. If Saputo reaches its targeted number of shares for repurchase, the Company may seek approval from the TSX to increase this limit in alignment with regulatory rules. The shares will be bought at market price based on their trading value at the time of the purchase; off-exchange block buybacks will occur at a price lower than the current market rate, per the applicable regulations. With the average daily trading volume noted recently, purchases will be capped at a specific quantity per day, with the provision for weekly block purchases of shares not held by insiders in compliance with TSX rules.
Automatic Purchase Plan
To facilitate the smooth implementation of the NCIB, Saputo has introduced an automatic purchase plan (APP). This plan provides clear instructions for repurchasing common shares on the market during any company-imposed blackout periods, and it will commence at the same time as the NCIB begins. The APP has received necessary approvals according to Canadian securities laws and has been cleared by the TSX, reflecting the Company’s commitment to regulatory compliance and efficient share repurchase strategies. Notably, Saputo has not engaged in purchasing its own shares over the past year.
Strategic Rationale Behind Share Buybacks
The repurchase of shares within the framework of the NCIB is a critical aspect of Saputo’s broader capital allocation strategy. This strategy aims to effectively balance various financial priorities, including capital investments, dividends, debt management, and share buybacks. Management at Saputo is optimistic that buying back its own shares can be a prudent investment of cash under favorable conditions. While there is a genuine intention to carry out share buybacks under the NCIB, the Company acknowledges that actual completion of such purchases is not guaranteed.
Understanding Saputo's Market Position
As one of the top dairy processors globally, Saputo plays a significant role in producing and distributing an extensive range of high-quality dairy products, including cheese and fluid milk. The Company is recognized as a leading manufacturer of cheese and fluid milk within Canada and stands out as a top dairy processor in several other regions, including parts of Australia and Argentina. Notably, in the United States, Saputo ranks among the top three cheese producers and is recognized for its extensive array of dairy products. In the United Kingdom, it is a leading name in producing branded cheese and dairy spreads, illustrating its diverse product offering.
Investor and Media Relations
For those looking to connect regarding investments or media inquiries about Saputo, dedicated contact channels are available. Nicholas Estrela serves as the Senior Director of Investor Relations and can be reached directly for investor inquiries, while media-related questions can be directed to the specific media contact number provided.
Frequently Asked Questions
What is the purpose of Saputo's Normal Course Issuer Bid?
The NCIB aims to repurchase shares to enhance shareholder value while retaining flexibility for growth investments.
How many shares does Saputo plan to repurchase?
Saputo plans to repurchase up to 8,487,169 common shares, amounting to about 2% of its total outstanding shares.
When will the NCIB start and end?
The NCIB will commence soon and will last for one year, concluding no later than one year after its start date.
What is the automatic purchase plan (APP)?
The APP allows Saputo to outline specific instructions for buying back shares during blackout periods, promoting efficient purchases in compliance with regulations.
How does Saputo view the share repurchase program?
Management believes share repurchases can be a responsible allocation of cash and are part of a broader strategy balancing dividends, debt reduction, and capital expenditures.
