Directors Offer to Buy Back Virgin Group
Oct. 04, 1988
LONDON (AP) _ The directors of Virgin Group PLC offered Tuesday to buy the 37 percent of the British music and entertainment group they don't already own at $2.37 a share, the same price the shares were floated at in November 1986.
The offer values the company at 248 million pounds, the equivalent of $420.7 million.
Virgin's founder and chairman, Richard Branson, announced July 7 that he was considering buying back the 50 million shares in the company that are publicly quoted. He said he wasn't satisfied with the stock market's valuation of the shares.
Virgin shares closed at 95 pence ($1.61) on July 6, the day before the possibility of a management buyout was announced. The shares have traded as low as 85 pence ($1.44 dollars).
Following Tuesday's announcement, Virgin shares were up 6 pence (10 cents) at 133 pence ($2.25) on the London Stock Exchange. Virgin shares are also traded in American depository receipt form in the United States.
The offer for the publicly held Virgin shares will be made by Glowtrack Ltd., a company formed by Branson and other Virgin directors for the sole purpose of buying Virgin.
Virgin announced May 18 pretax profit for the six months ended Jan. 31 of 14.5 million pounds ($24.6 million), down from 15.2 million pounds ($25.8 million) the year before.
Virgin Group is separate from Branson's Virgin Atlantic Airways, the cut- rate trans-Atlantic airline which is owned by the privately held Voyager Group Ltd.