Fresenius Medical Care AG (FMS) Thursday announced the approval of a share buy-back program, whereby the company's ordinary shares with an aggregate value of up to 385 million euros (about $500 million) would be repurchased, following a normal course issuer bid in the open market during the next six months. The program will be financed from cash flow and existing credit facilities.
The management board and supervisory board of the company also approved a proposal to optimize the organization's capital structure by eliminating the remainder of the outstanding preference shares, which represent around 1.3 percent of the company's total share capital.
The company will ask shareholders at its upcoming annual general meeting on May 16 and in a separate meeting of preference shareholders to be held later to approve the mandatory conversion of all preference shares into ordinary shares on a 1:1 basis.
The conversion will be effected without a requirement for any additional payment by preference shareholders.
However, the company has been in discussions with a major preference shareholder, a reputable European financial institution holding about 77 percent of the outstanding preference shares, who has agreed with the company to support the proposed resolution and has undertaken to pay a conversion premium to the company relating to its preference shares.
The premium amount corresponds to an agreed value of the average spread during the 3-months period from January 1 through March 31 between the preference shares and the ordinary shares of around 9 euros per preference share or 27 million euros for the major preference shareholder's total preference share position.
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