Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Russia's Gazprom to sell 3% of own shares, bids exceeded $3 billion

Published 07/25/2019, 12:12 PM
Updated 07/25/2019, 02:47 PM
Russia's Gazprom to sell 3% of own shares, bids exceeded $3 billion

Russia's Gazprom to sell 3% of own shares, bids exceeded $3 billion

By Olga Popova and Maria Grabar

MOSCOW (Reuters) - Russia's Gazprom (MM:GAZP), the world's largest conventional gas producer, has received bids worth $3.15 billion for 3 percent of its own shares that it decided to sell after the stock hit its highest level in more than a decade.

Gazprom said on Thursday it had received 494 bids that altogether reached 198.89 billion roubles ($3.15 billion) for 2.92% of its own shares.

The stake is worth $2.3 billion, based on Wednesday's closing price and is part of a wider 6.6% stake known as treasury shares that Gazprom holds in itself.

Earlier on Thursday, the Moscow Exchange said that Gazprom subsidiaries Gazprom Gerosgaz Holdings BV and Rosingaz Limited will offer a combined stake of 693.6 million ordinary Gazprom shares to be sold during the day in one lot.

Gazprom shares were up by 4.5% at 1527 GMT, outperforming the overall market (IMOEX) which was 0.6% up.

Earlier this year, Gazprom, controlled by the Russian state, replaced key executives and promised to boost its dividend payout to 50% of net profits, spurring a rally in its shares to their highest since mid-2008.

Dmitry Marinchenko, an analyst with Fitch, said that the current Gazprom stock environment, partially boosted by the proposed changes in the dividend policy, supported the company's decision to sell part of its treasury shares.

But Vladislav Silayev, a trader with Alfa Capital, said that Gazprom's share sale could be a signal that the rally might now run out of steam.

"The sale usually happens when the seller is happy with the price. Looks like that the seller thinks that the (share price) growth potential is limited," Silayev said.

Gazprom's market value is $79.4 billion, second in Russia to Sberbank's $82 billion, according to Refinitiv Eikon data.

Gazprom Chief Executive Alexei Miller told the company's shareholders last month that high-level management changes would continue to improve the way Gazprom operates across its businesses.

Ronald Smith, an analyst with Citibank in Moscow, said that since late 2018, six of a total 15 management board members have been replaced.

"While the long-term impact of those efforts to improve efficiency remain to be seen, even in isolation the dividend policy change is profoundly important, something that may well mark a turning point in the company’s history from the point of view of investors," Smith said in a July 9th report.

Gazprom's oil unit, Gazprom Neft (MM:SIBN) is now also considering following its parent and increasing dividends.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.