Sampo share buybacks – Q&A

Sampo announced today that it will return excess capital to its shareholders by launching a share buyback programme. 

Release

The aggregate purchase price of all Sampo A shares to be acquired under the buyback programme shall not exceed EUR 750 million. The maximum amount of Sampo A shares that can be repurchased is 20,000,000 shares corresponding to approximately 3.6 per cent of the total number of shares in Sampo.

The share repurchases will start on 4 October 2021 at the earliest and end by 18 May 2022.

The purpose of the buyback programme is to return excess capital to shareholders by reducing Sampo plc’s capital, as the repurchased shares will be cancelled. The repurchases will reduce funds available for distribution of profit.

Why did Sampo choose buybacks instead of dividends?

As always, we listen to our shareholders carefully and base our actions on their feedback. Naturally, some shareholders prefer dividends whereas others prefer buybacks. This time we decided to use the proceeds from the latest Nordea sale for buybacks, which is a tax-friendly way of returning excess capital for many institutional and private investors.

Will Sampo later distribute excess capital also in dividends?

The decisions on the distribution method of any potential excess capital will be made over time as we continue to reduce our ownership in Nordea and other financial investments. However, it is likely that both dividends and buybacks would be used if Sampo decided to further return excess capital to shareholders.

How will Sampo’s shareholders benefit from buybacks?

By returning excess capital via buybacks, Sampo delivers on its commitment to disciplined capital management while at the same time reducing its total share count, which enhances earnings per share and dividends per share growth. The buybacks allow shareholders to choose between receiving cash returns by selling shares or increasing their stake in the company.

Instead of cancelling the repurchased shares, can Sampo use them for other purposes, for example management’s compensation?

No. According to the authorization by the AGM, all repurchased shares must be cancelled.

From which market will the shares be acquired?

Shares will be acquired through public trading on Nasdaq Helsinki, CBOE, Turquoise and Aquis.

Which bank will acquire the shares?

The shares will be acquired by Exane BNP Paribas. The repurchases will be made in accordance with the safe harbour arrangement of Article 5 of the EU Market Abuse Regulation. This means that Exane BNP Paribas will act independently in accordance with its mandate without Sampo’s influence. Thus, the programme can also be run during Sampo’s silent period.

How many shares can be repurchased per day?

Based on regulation (MAR), the maximum number of shares that can be repurchased is 25 per cent of the average daily volume per each market.

Is it possible to acquire a larger block of shares from a single shareholder?

Block trades are not allowed in this programme.

How will the buybacks affect Sampo’s solvency and leverage?

Buybacks will affect the same way as dividends, i.e. decrease Solvency II ratio and increase financial leverage ratio.

At the end of June 2021, Sampo’s Solvency II ratio was 209 per cent and financial leverage 28.4 per cent. If both the latest Nordea share sale and the whole EUR 750 share buyback had taken place at the end of June, Sampo’s Solvency II ratio would have been 207 per cent and financial leverage 29.4 per cent.

Will the buybacks affect Sampo’s dividend policy?

Buybacks will not affect Sampo’s dividend policy, according to which the total annual dividends paid will be at least 70 per cent of Group's net profit for the year (excluding extraordinary items).