CPI Property Group Approves CZK 10B Share Buyback Plan

Radovan Vítek’s CPI Property Group Group is preparing a massive share buyback. It wants to buy up to 650 million of its shares from shareholders. It offers 0.616 euros per share, which means that it intends to pay a total of about 400 million euros for the shares, approximately 10.27 billion crowns. Vítek himself wants to offer the shares for sale.

The company’s shareholders approved the repurchase of shares at the company’s general meeting on 28 May last year. The company can buy up to one billion of them. On Monday, 15 February, the Board of Directors decided to repurchase shares within the approved plan.

As in the past, the main shareholder of CPI Property Group Vítek will use the opportunity to sell this year. “The repurchase is carried out in agreement with Radovan Vítek,” said the group’s spokesman Jakub Velen.

“The reason is to reduce the number of loans that (Radovan Vítek) took out of the group for investments outside the group. For example, investments in private real estate or projects in Italy, “Velen said. Vítek will use the money obtained from the repurchase to repay the loan from CPI PG.

The share repurchase applies to all shareholders who owned the securities as of 12 February. The offer is valid from 16 to 22 February. The condition for completing the repurchase is that the shareholders will offer at least one hundred million shares for sale, which should be fulfilled with Vítek’s participation.

This is nothing new for CPI PG. Vítek’s group has repurchased its shares several times in the past. For example, two years ago, the company bought 362.2 million treasury shares at EUR 0.30 per share.

Similar repurchases of own shares are common in the Czech Republic. In recent years, they have been carried out by the beverage manufacturer Kofola, the telecommunications company O2, or, for example, the semi-state energy colossus ČEZ.

In addition to the published repurchase offer, CPI PG also announced its financial results. EBITDA – earnings before interest, taxes, depreciation, and amortization – rose by 16 percent year-on-year to 337 million euros.

“The reason is the growth in net rental income, the contribution of Globalworth, and strict cost control. Together, these factors replaced the lower revenue from hotels in 2020,” according to CPIPG.

Net rental income increased by 15 percent to the real estate group to EUR 338 million, which was also due to acquisitions, primarily in the Polish market. In addition to the purchase of office buildings in Warsaw, Vítkova Group also acquired less than 30 percent in Globalworth, which owns office complexes in Poland and Romania.

In terms of share repurchases, they are most common in the US capital market. However, the coronavirus knocked down buyouts in the US as well. While in the last three months of 2019, the five largest US companies bought S&P Dow Jones Indices shares for 182 billion shares. Last year in the same period it was $ 116 billion and in the third quarter of last year only 102 billion.

More and more companies in the United States are considering buyouts. In recent weeks, for example, the technology colossus Netflix and several large banks have stated this.