Home / Front Page/ JKH’s Rs. 11 b share buyback offer ends

JKH’s Rs. 11 b share buyback offer ends

Comments / {{hitsCtrl.values.hits}} Views / Thursday, 17 January 2019 01:36


  •  Acceptance only 46% of offer but additional demand to be used to complete deal
  • Acceptance rate points to majority of shareholders believing JKH share has greater upside going forward


The Rs. 11 billion worth share buyback offer of John Keells Holdings (JKH) had ended with the move triggering acceptance of only 46% of the offer.

JKH said that its offer to repurchase 69.37 million shares or 5% of shares in issue received acceptances of 32.2 million shares amounting to 46.39% of the offer. However those who accepted had requested for additional repurchase of 68.53 million shares. 

The offer was on a pro-rata basis of one share for every 20 shares held at Rs. 160 each.

JKH will complete the offer of 69.37 million by accepting additional applications on pro rata basis as per their shareholding. 

Company analysts said the level of acceptance points to majority of shareholders believing JKH share has greater upside going forward. 

JKH share closed 2018 at Rs. 159, up 6.9% from the previous year.The 52-week highest share price of JKH in 2018 was Rs. 167 and the lowest was Rs. 126. Yesterday it closed at Rs. 152.10.

Given recent political instability and depressed economic performance, some anticipated foreign shareholders of JKH would accept the buyback offer. However the fact that majority had not, analysts opined, reflects their forward view as well as overall sentiment on emerging/frontier markets.

Foreign shareholding in JKH amounts to 47.6% and has nearly 11,700 shareholders in total.

According to CT CLSA, JKH share was up 1% in the past 12 months, outperforming the market by 8% and trades at 9% discount to its estimates sum of the parts valuation of Rs. 173.

JKH was the most traded stock in 2018 with 318 million shares changing hands for Rs. 47.3 billion accounting for 23.6% of CSE’s total as per CT CLSA data. However in terms of market capitalisation JKH’s figure of Rs. 220.6 billion is behind number one Ceylon Tobacco’sRs. 268 billion.

In announcing the share buyback, JKH said that the Board was of the view that the share is not reflective of the value of the Company and did not adequately represent the growth prospects. This presented an opportunity for JKH to repurchase its shares. Further, the strength of JKH’s Balance Sheet, along with existing cash reserves, was more than adequate to fund the Company’s planned investment pipeline while retaining its track record of dividend pay-out.

Investors toasted the announcement on 12 November pushing JKH share price to a high of Rs. 152 before closing up Rs. 6, or 4%.

The pay-out will be from tax-paid dividend reserves hence won’t be subject to the Withholding Tax. It was also the first share buyback by JKH after 2008. 


Share This Article

Facebook Twitter


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

Ministry of Religious Affairs and Interfaith Harmony: A nation rich in unity

Friday, 15 November 2019

This series is based on business leader Dhammika Perera’s recently revealed ‘Economic Growth Strategy and Action Plan to increase GDP Per Capita from $ 4,000 to $ 12,000’. The document outlines goals and action plans for 23 ministries and to

Securing a People’s Constitution

Friday, 15 November 2019

The need for making a People’s Constitution has become a topic of interest not only among the public but also among some candidates of the Presidential Election. Rohan Pallewatte and Mahesh Senanayake have included it in their election manifestos.

The Presidential Election and Dark Public Relations

Friday, 15 November 2019

At the moment we can see only the mudslinging in the Sri Lankan Presidential Election. According to literature, the main objective of Dark Public Relations (DPR) or negative public relations is to discredit someone else, who may pose a threat to the

Keen interest in the US on Sri Lankan elections

Friday, 15 November 2019

While the only show in Trump Town is the contentious impeachment hearings which commenced today, the premier National Public Radio (NRP) devoted a segment to a concise report by its special correspondent Lauren Frayer who had travelled to Colombo and

Columnists More