Bouygues SA (EN) shareholders approved a plan to buy back as much as 1.25 billion euros ($1.7 billion) of the French construction company’s own stocks in a bid to boost shares that have lost a fifth of their value this year.
The Paris-based company is offering 30 euros for each share, to buy as much as 11.7 percent of the company stocks. The move may boost 2011 earnings per share by about 11 percent if the full amount is repurchased, Bouygues said when it presented the offer on Aug. 31. Bouygues shares traded as high as 25.79 euros in Paris today.
The builder, which also controls 90 percent of France’s third-largest mobile-phone operator, 43 percent of television broadcaster TF1 and 30 percent of the train- and power-equipment maker Alstom SA, had no better investment options within the framework of its “very prudent financial management policy” than to buy back stock, Chief Executive Officer Martin Bouygues said on Aug. 31.
Standard and Poor’s said on Sept. 1 it may cut Bouygues’s “A-” credit rating, citing a “less conservative” financial policy and an expected drop in free cash flow generation in the next 12 months because of an increase in capital expenditures such as the purchase of new wireless spectrum being auction in France.
SCDM, the family holding that owns 18.1 percent of Bouygues shares, won’t tender its shares at the offer, Martin Bouygues said.
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