Axelum board approves P0.5B share buyback plan

Axelum Resources [AXLM 2.26, up 0.0%; 66% avgVol] [link] disclosed that its board approved a 6-month buyback program with the authorization to purchase up to P500 million worth of AXLM shares at market prices. The terms of the buyback program allow the board to extend the program by an additional six months, and to increase the amount available for the buyback program “from time to time” depending on the circumstances and the availability of unrestricted retained earnings. As reported by InsiderPH, the buyback would represent approximately 5.8% of AXLM’s outstanding shares. Manny V. Pangilinan (MVP) championed Metro Pacific’s P5.3 billion deal to acquire a 34.76% stake in AXLM that was completed back in December 2023, at a purchase price of P3.83/share.

MB BOTTOM-LINE:  To me, this looks like a bit of window-dressing to help improve the look of that disastrous move into AXLM. The company’s shares were trading at P3.51/share in the days leading up to the breaking news that MVP was negotiating a massive stake acquisition; AXLM’s shares immediately began a long and significant downward trend to bottom out at P1.82/share in November, right before news broke that MVP was unilaterally making changes to the deal to include face-saving clawback language to tie valuation to AXLM’s EBITDA performance. MVP and MPIC are still underwater on this deal. Before this buyback, AXLM’s stock price had actually retested that November 2023 low, but then saw a massive surge of demand just a few days before this announcement was made. AXLM is up 25% over the past two weeks. I mean, it’s still down 6% year-to-date, down 14% over the past three years, down 55% from its IPO, and down 41% from MVP’s purchase price, but maybe this buyback will take away a little bit of that sting. Am I just bitter because MVP appears to have completely ditched his aggressive agricultural integration strategy? Maybe. But MPIC’s flip-flopping on this deal kicked off a cascade of oddball decisions that signaled (to me at least) a lack of focus and long-term planning that played into and seemingly reinforced some of the tired MVP stereotypes that bubbled up to the surface when the MPIC privatization plan was announced.

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