Business World

Saturday 20 July 2019

Babcock buyback plan goes to shareholders

Joe Brennan

Eircom's majority owner Babcock & Brown Capital (B&BC), a Sydney-listed investment fund, is convening a general meeting on April 21 for shareholders to approve a Aus$310m (€187m) buyback of half its own stock.

This follows recent pressure from activist shareholder PendVest, the UK-based hedge fund co-founded by Cavan-born financier Seamus Fitzpatrick, to find ways to bolster the fund's share price. B&BC's stock is trading at about a 50pc discount to net asset value. PendVest owns a 5pc stake in B&BC, which, in turn, holds 57pc of Eircom. The telecom's employee share ownership trust (Esot) owns a further 35pc.

B&BC had initially planned to invest its Aus$445m cash pile in a series of "specified identified investments". Following pressure from PendVest late last year, it unveiled a 5pc share buyback. It upped the target to 9.9pc in January. Last month, however, B&BC announced "an aggressive capital management programme" -- allocating Aus$310m to the buyback.

B&BC is campaigning for a structural separation of the Eircom network from the retail part of the business.

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