Bridgepoint announces £50m share buyback
Private equity firm Bridgepoint has announced a share buyback programme of up to £50m.
The programme, which will begin immediately, is expected to be completed on or before 30 September.
"Bridgepoint's strategy and growth agenda, including its approach to diversification, remains unchanged," it said.
"This buyback programme reflects the board's confidence in Bridgepoint's fundamental value and long-term prospects, at a time when short-term market dislocations mean that there is value in allocating capital to repurchase the company's shares.
"The buyback programme represents a targeted use of below 20% of the company's current net cash given the value the board sees in the current valuation."
At 1300 GMT, the shares were up 7.2% at 244.40p.
Broker Peel Hunt, which rates the shares at ‘add’, said the buyback was "sensible".
"The board has specifically stated this reflects the value which it sees given the current valuation of the shares," said analyst David McCann.
"We think this in turn may implicitly signal a degree of confidence in its ability to complete the targeted €7bn fund VII fund-raise and other strategic objectives. Whilst this will reduce the group firepower a little, the announcement states it will represent less than 20% of group net cash, and we also note that any meaningfully sized acquisition would likely have required the use of new share capital regardless.
"We concur that the shares are modestly undervalued by the market, we see this as a sensible use of some of the capital available and an important signal of board confidence in the prospects. We continue to think Bridgepoint is inexpensive on an absolute basis. We still much prefer the more diversified ICG and Petershill in the UK listed private markets space."