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Inwit Spa's €300 Million Share Buyback: A Strategic Move to Boost Shareholder Value

Charles HayesTuesday, Apr 22, 2025 1:40 am ET

11min read

In a move to enhance shareholder returns and optimize its capital structure, Italian infrastructure giant Inwit Spa (INW.MI) has announced the initiation of its first tranche of a share buyback program, targeting up to €300 million in repurchases. The program, set to begin on April 22, 2025, marks a significant step in the company’s 2025–2030 strategic plan, which includes a broader €400 million buyback commitment to align with its growing financial flexibility and long-term growth targets.

Business Overview: A Strong Foundation for Growth

Inwit, a leading player in digital infrastructure, reported robust financial results for 2024, with €1.036 billion in consolidated revenue—a 7.9% year-over-year increase—and a 7.7% rise in EBITDAaL (EBITDA adjusted for leases). The company’s 2025–2030 business plan aims to invest €1.5 billion in digital infrastructure by 2030, targeting a 6% compound annual growth rate (CAGR) in EBITDAaL. This buyback program, alongside an ordinary dividend of over €480 million and a special dividend of €200 million, underscores management’s focus on maximizing shareholder value.

The Buyback Details: Scale, Scope, and Intent

Tranche 1: The first phase of the buyback, starting April 22, allows Inwit to repurchase up to €300 million in shares, representing approximately 139.8 million ordinary shares. As of March 2025, the company already held 116,007 treasury shares (0.012% of its total share capital).
Regulatory Compliance: The buyback adheres to Italian securities regulations, limiting repurchases to 2.5% of issued share capital, and complies with the Market Abuse Regulation (MAR). Purchases will be executed via standardized market transactions or negotiated deals, ensuring transparency and avoiding market manipulation.
Purpose: The repurchases aim to address potential undervaluation of Inwit’s shares, improve financial flexibility, and align its capital structure with long-term growth objectives.

Market Context: Valuation and Shareholder Impact

Inwit’s shares closed at €9.48 per share on March 24, 2025, down 0.5% from prior levels. The buyback could stabilize or boost the stock price by reducing the number of shares outstanding, thereby increasing metrics like EPS and ROE. Historically, Inwit has used buybacks strategically: its 2023–2027 program included a €150 million tranche completed by October 2024, which helped offset dilution from employee share plans.

Risks and Considerations

Market Conditions: The buyback’s execution depends on market volatility and regulatory constraints. In Italy, buybacks are limited to 1% of share capital per month, requiring careful pacing.
Debt Management: Concurrently, Inwit is refinancing €1.0 billion in 1.875% notes due July 2026 via a tender offer, with proceeds from a new €750 million 3.750% bond due 2030. This could improve its debt maturity profile but may divert cash from buybacks if bond repurchases are prioritized.
Regulatory Restrictions: The buyback is subject to distribution limits in jurisdictions like the U.S., as outlined in its Tender Offer Memorandum, which could affect liquidity.

Conclusion: A Balanced Play for Value Creation

Inwit’s €300 million buyback initiative, paired with its dividend policy and infrastructure investments, positions the company to capitalize on its strong financial health. With a BB+ credit rating (S&P) and BBB- (Fitch), Inwit maintains a prudent capital structure while pursuing growth. The buyback’s success hinges on execution against its 2025–2030 targets, which include €1.5 billion in digital infrastructure investments and a 6% EBITDAaL CAGR.

Investors should monitor share repurchase progress and debt refinancing outcomes, as well as Inwit’s ability to sustain revenue growth amid macroeconomic headwinds. With its first tranche underway, Inwit demonstrates a clear commitment to shareholder returns—a positive signal for long-term holders.

As Inwit navigates its strategic priorities, the buyback serves not just as a tactical move but as a reflection of confidence in its ability to deliver on its ambitious, decade-long plan.

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