DigiPlus Interactive has brought back its share buyback program after the company’s board approved the decision after shareholders asked to exceed the number of shares repurchased.
The shareholders wrote:
We urge the Board to pursue a substantial share buyback programme at current prices, which we believe is by far the greatest value creation opportunity available to shareholders today.
According to the statement which was officially submitted to the Philippine Stock Exchange, it can be noted that the board has agreed to the initiation of the share buyback program, meaning that this strategy which was launched back in 2005 has been revived.
The decision comes after an open letter issued on July 6 by Betplay Capital Foundation, ZJ Foundation, and MJ Foundation, investment firms owned by the Juroszek family from Poland. These firms hold the shares of DigiPlus. Thus, the investors expressed their point of view that currently, the shares of the company are undervalued since the company takes the leading position in the Philippine gambling market.
The letter stated:
The shares are so far below any reasonable estimate of fair value that buying them back is worth more to shareholders than any other use of that capital we can identify.
In the opinion of the investors, applying the average multiples of peers shows that the value of the companies is around PHP30 which is more than a 150 percent upside from the current trading price.
The group also believes that there is enough financial flexibility for DigiPlus to finance a larger share buyback program because it has around PHP20 billion on its accounts.
Finally, it can be added that the program adopted by DigiPlus is the follow–up of the buyback plan that was announced in July.