CGI Inc. is buying back and cancelling 4.2 million of its class-A subordinate voting shares from the Caisse de depot et placement du Québec for $400 million.
The technology-consulting company said it will pay $95.13 per share, a slight discount to where the shares closed on the Toronto Stock Exchange last week at $98.07. CGI said the transaction will be made in connection with a periodic portfolio rebalancing by the Caisse.
The Quebec pension fund manager will continue to hold 27.2 million class-A shares, representing a 10.9 per cent stake in the company. The share repurchase will be made under CGI’s normal course issuer bid. By buying back its shares, a company reduces its equity base, spreading profits over fewer shares. That increases its earnings per share, a key ratio used to determine a company’s financial health.
“CGI continues to demonstrate the resilience of its business model by once again delivering solid financial results,” said Kim Thomassin, executive vice-president and head of investments in Quebec and stewardship investing at the Caisse, in a press release. “As in past years, when the conditions are right, [the Caisse] monetizes a portion of its investment to benefit its depositors. [The Caisse] remains one of CGI’s significant shareholders and intends to continue supporting the long-term growth of this global IT and business consulting services leader.”