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Recruitment giant Adecco Group (ADEN: VX) announced that it has completed the €400 million share buyback programme launched in July 2012. Adecco repurchased 9,721,446 of its shares via the second trading line on the SIX Swiss Exchange.
The shares purchased are the equivalent of 5.14% of the share capital. The average purchase price per share, excluding commissions, was CHF 50.08 (€40.48).
The 2014 Adecco General Shareholders Meeting will resolve on the reduction of share capital through the cancellation of the repurchased shares.
Further, and as anticipated in Adecco’s Q2 2013 press release, Adecco launched a new share buyback programme of up to €250 million.
Commenting to Staffing Industry Analysts, an Adecco spokesman confirmed the reasons they undertook, and are continuing to undertake, the share buyback scheme. “The rationale for new share buyback programme is as follows: we have a stated policy to do no acquisitions at all for the next couple of years and we are comfortable with the amount of net debt that we have, therefore we have decided that the excess cash (free cash flow after dividends) that we generate should be returned to shareholders through a share buyback programme. As we have now completed the first programme, we needed to launch a second programme in order to continue returning the excess cash.”
The new share buyback programme will also be executed on the existing second trading line on SIX Swiss Exchange. Repurchased shares will be cancelled after formal shareholder approval. Shares purchased on the second trading line are subject to the Swiss federal withholding tax of 35% on the difference between the buyback price of the Adecco share and its nominal value of CHF 1.00 (€0.81).