Hochtief AG (HOT), the German builder controlled by Spain’s Actividades de Construccion & Servicios SA, will buy back up to 260 million euros ($347 million) of shares over the next five years after the stock closed at its lowest in two months.
The buyback of 4.3 million shares represents about 5.6 percent of the Essen, Germany-based builder’s capital, it said in a statement today. That will boost Hochtief’s stake in itself to 10 percent.
“The board decided it was an opportune juncture to take this step,” spokesman Bernd Puetter said by phone.
Hochtief decided to buy back shares after the stock declined 10 percent in the past month. The company closed earlier today at 48.87 euros, the lowest since April 8 and valuing the company at 3.9 billion euros. Chief Executive Officer Marcelino Fernandez Verdes is aiming to stabilize profitability by focusing Germany’s largest construction company on its main building business, reversing a decade-long strategy of expanding into services.
Verdes, who assumed the CEO role in November after joining from ACS initially as chief operating officer last March, last month reached a 1.5 billion-euro deal to sell the airports division and is also seeking to offload property development and facility management units. ACS, based in Madrid, currently owns 49.9 percent of Hochtief’s outstanding shares with 54.3 percent of the voting rights, according to the company’s website.
Pretax profit in the first quarter jumped to 123 million euros from a year-earlier loss of 92 million euros, beating analyst estimates. Hochtief predicts full-year pretax profit of between 600 million euros and 680 million euros, excluding earnings from the airports and one-time reorganization costs.
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