According to today’s ‘Parkiet’ daily, Agora spokesperson Mrs. Szwed-Strych said that the management would consider a proposal for resuming a shares buyback program, around the time of AGM in May /June 2007. The previous program, which amounted to PLN120m and covered 1.8m shares two years ago, was interrupted last year owing to ‘Dziennik’ entry. The spokesperson gave no indication on the size of the new buyback.
Our view: We estimate the size of a new buy back program at 1.41m shares, or 2.6% of the total shares outstanding, assuming that 1/5 of the company’s cash pile, which we estimate at to PLN 300m, would be used to buy back the existing stock. We might see a positive market reaction on the back of the news today. Nevertheless, we reiterate our Hold rating for Agora.