Peter Wilson-chaired Reece Limited has announced an off-market buy-back of the company's shares, in a bid to generate flexibility for further growth.
Peter Wilson-chaired Reece Limited has announced an off-market buy-back of the company's shares, in a bid to generate flexibility for further growth.
The plumbing and bathroom product supplier told the market on Monday that it's board was targeting $250 million during the buy-back, with the price between $11 and $13 per share.
The $11 floor price represents a 6.6 per cent premium to Reece's final closing price on September 19, while the $13 ceiling represents a 26 per cent premium.
It will begin on September 29 and run through until October 17 at 2pm AWST.
"Buy-backs are a key lever within Reece’s broader approach to capital management, and the
current environment makes this the right time to act," the company said.
"Reece has a strong balance sheet with excess capacity.
"The board is targeting a $250 million buy-back, with flexibility to accept more or
less depending on demand and pricing, market conditions and other factors, subject to an upper limit of $400 million.
"After careful consideration of alternatives, the board believes this is an efficient way to return
excess capital to shareholders while maintaining a conservative leverage ratio. It also ensures
there is flexibility to fund future growth – both organic and inorganic – as outlined in Reece’s
capital management priorities."
The market reacted positively to the news early on Monday, with shares up 13 per cent to $11.66 as of 8.16am AWST.
