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Exit from Taiwan lifts shares of French company Carrefour
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PARIS (Reuters) – Shares in French food retailer Carrefour rose 3% on Wednesday after it agreed to sell its remaining 60% stake in its Taiwan
PARIS (Reuters) – Shares in French food retailer Carrefour rose 3% on Wednesday after it agreed to sell its remaining 60% stake in its Taiwan business, sparking hopes among some investors it could use the extra firepower to buy back shares.
By 0702 GMT, Carrefour shares were up 3.01% at 17.48 euros.
The transaction, which values Carrefour Taiwan at an enterprise value of 2.0 billion euros, is set to be completed by mid-2023, the French company said in a statement.
“This is at a better price than originally speculated (which was 1.6 billion euros back in August 2021) given an estimated enterprise value of 2 billion (for 100% of the business),” wrote brokerage Jefferies.
“A mid-2023 completion should provide the firepower for another, sizeable share buyback. We estimate an earnings accretion in the mid single digit region,” they added.
(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)
A share buyback is when a company purchases its own shares from the marketplace, reducing the number of outstanding shares. This can increase the value of remaining shares and is often seen as a way to return capital to shareholders.
Enterprise value is a measure of a company's total value, often used as a comprehensive alternative to market capitalization. It includes market capitalization, debt, and excludes cash and cash equivalents.
Earnings accretion refers to an increase in a company's earnings per share (EPS) resulting from a transaction, such as an acquisition or share buyback, which can enhance shareholder value.
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