that and this Nokia Plans to Buy Back Up to EU1.45 Bln in Shares
Helsinki, March 23 (Bloomberg) -- Nokia Oyj, the world's largest mobile-phone maker, said it plans to buy back as much as 1.45 billion euros ($1.3 billion) in stock to finance acquisitions or to cancel the shares.
The Helsinki-based company on Wednesday received permission from shareholders to repurchase the maximum 50 million shares. The buyback will start on March 30 at the earliest.
The plan to buy back as much as 1 percent of the company's shares comes after Nokia saw its stock slump 49 percent since mid- December on fears demand for mobile phones and networks is slowing. Nokia aims to boost its global market share to 40 percent from 32 percent last year as it sells new phones with easier Internet access.
``This is a signal from management that the stock price is undervalued,'' said Sami Sormunen, a fund manager at Conventum Funds, who holds Nokia shares.
Nokia shares, which dropped 10 percent in the two sessions before today, rose as much as 2.45 euros, or 9.1 percent, to 29.45 today. They traded at 28.80 euros just before the announcement.
``The shares will be used to further develop the capital structure of the Company, to finance or execute acquisitions or other arrangements,'' or they may be transferred in other ways or canceled, Nokia said in a statement issued through the Helsinki exchange.
Analysts said buying back the shares won't compromise product development at Nokia, which has 4.2 billion euros in cash and cash equivalents.
``Buying shares and investing in research and development do not exclude each other,'' said Erkki Vesola, an analyst at Mandatum Bank. ``They have enough cash.''
Mar/23/2001 8:24 ET |
