Asseco Poland, Eastern Europe's largest software maker, plans to replace 9.3 million of its treasury shares with new issues over the next three years to fund acquisitions.
Chief executive Adam Goral said on Monday the company, among Europe's top five software makers, wants to issue 3.1 million shares, worth about 4 percent of its capital, in the first quarter of next year.
Asseco plans to use the new shares, worth some 180 million zlotys ($66 million) at current prices, to replace a chunk of the 12 percent stake it holds in itself as a legacy from a merger with rival Prokom Software, which held a stake in Asseco.
Shares rose almost 5 percent, extending their growth to over 20 percent this year. Analysts said the treasury share overhang was among the reasons for the company's underperformance against Warsaw's main WIG20 index' .WIG20 32-percent gain this year.
It's a good idea, as finally something will happen to those shares, said DM BZ WBK analyst Pawel Puchalski. If they have such a pumped up pipeline and if they want to expand, it's better they do it now, in the times of crisis, and buy.
Asseco, valued at $1.6 billion, has been on a buying spree around the continent in the last few years, culminating in the takeover of local rival and shareholder Prokom in 2008.
Together with Prokom's portfolio, Asseco bought 11.6 million of its own shares. A year ago the company sold a 2.3-million share chunk for 103.5 million zlotys, drawing criticism for selling to selected investors.
On January 5 our management will vote on an issue together with retiring a third of our treasury shares, CEO Goral told reporters on Monday. It will be a 3.1 million rights issue, which we want to finalise at the start of March.
The move should allow the company to save capital gains tax it would have to pay if it were to sell existing shares, and gain cash for planned takovers. The group is currently eyeing 12 foreign and one Polish target.
Mergers and high-margin own software products, which make up 56 percent of its sales, allowed Asseco to beat market consensus with a 33-percent net profit growth in the third quarter.
(Reporting by Adrian Krajewski; Editing by David Cowell)