Bangalore/New Delhi, August 19: Global software major Infosys Ltd announced Saturday that it would buy back 11.3 crore shares of Rs 5 face value at Rs 1,150 each via a tender offer.
“The Board has approved a proposal to buy back 11.3 crore equity shares of Rs 5 face value from the shareholders at a price of Rs 1,150 per share for an amount not exceeding Rs 13,000 crore ($2 billion),” said the IT major in a regulatory filing on the Bombay Stock Exchange (BSE).
The offer size is 20.51 per cent of the total paid-up capital and free reserves, aggregating up to 11.3 crore shares or 4.92 per cent of the equity shares.
The buyback decision came a day after the company’s Chief Executive Officer (CEO) Vishal Sikka resigned and was appointed Executive Vice-Chairman till a new CEO takes charge by March 31, 2018.
The offer price at Rs 1,150 per share is Rs 226.90 more than Rs 923.10 per share closing price on Friday when it plunged 9.6 per cent after Sikka’s resignation spooked investors and is at around 18 per cent premium of the August 16 closing price.
The company closed the trading window on August 16 in view of the Board meeting on the share buyback and will reopen on August 22.
The buyback offer does not include costs like securities transaction tax, GST, stamp duty, filing fees, advisors fees, brokerage, public announcement expenses, printing and dispatch expenses and other expenses.
The buyback price also represents a premium of 19 per cent of the weighted average market price during the last three months.
“The buyback is subject to approval of the shareholders by way of a special resolution through postal ballot and its record date will be decided soon,” added the filing.
The Board has formed a Buyback Committee comprising Co-Chairman Ravi Venkatesan, Vishal Sikka, Interim CEO U.B. Pravin Rao, Chief Financial Officer (CFO) M.D. Ranganath, Deputy CFO Jayesh Sanghrajka, General Counsel Inderpreet Sawhney and Company Secretary A.G.S. Manikantha.
Infosys buyback comes a month after Wipro announced July 20 its decision to buy back 34.3 crore equity shares of Rs 2 each for Rs 11,000 crore ($1.7 billion) at Rs 320 per share.
US law firms probe Infosys
Four US law firms have said they are investigating potential claims on behalf of Infosys investors on whether the company and some of its officials and directors have violated federal securities laws.
The development comes a day after the IT major, which is also listed in the US, saw its CEO Vishal Sikka resign citing slander by founders, led by NR Narayana Murthy.
The US law firms are: Bronstein, Gewirtz & Grossman; Rosen Law Firm; Pomerantz Law Firm and Goldberg Law PC.
Rosen said in a statement that it is investigating “potential securities claims” on behalf of Infosys shareholders resulting from allegations that the firm may have issued materially misleading business information to the investing public.
Bronstein said its investigation concerns whether Infosys and certain officers and/or directors have complied with federal securities laws.
Pomerantz said its investigation is to ascertain whether Infosys and some of its officers/directors have engaged in securities fraud or other unlawful business practices. Agencies