The WPP Aunz Ltd (ASX: WPP) share price is unmoving today after the company's shareholders voted in favour of a scheme that will see WPP buy back all of the shares it doesn't own.
At the time of writing, the WPP Aunz share price is back where it started at the market open, trading at 65.2 cents per share.
Wpp Aunz Ltd is a marketing agency in Australia that markets itself as "Australia's leading creative transformation company".
It operates in four reportable segments: Global Integrated Agencies, Large Format Production, Public Relations & Public Affairs, and Specialist Communications. The majority of the revenue is generated from the Global Integrated Agencies segment.
WPP's share buyback scheme
The majority of WPP AUNZ's minority shareholders voted in favour of the proposed scheme, under which WPP via Cavendish Square Holding BV (an indirect wholly-owned subsidiary of WPP) will acquire all of the company's shares that it does not already own.
The company said 96.45% of votes cast by its minority shareholders at the scheme meeting (either in person or by proxy) voted in favour of the scheme.
Share buybacks are a fairly low-risk method of a company profiting from its continued growth, assuming continued investment in research and development is impractical as often is the case with marketing agencies.
WPP management pleased with the result
WPP AUNZ chair Robert Mactier said it was an important step for WPP's continued progression.
Minority shareholders have overwhelmingly voted in favour of the transaction which was negotiated on their behalf by the Independent Board Committee.
The significant transaction premium, compared to recent trading levels, was based on an improved outlook for the business which was delivered as a result of the significant work from [CEO] Jens Monsees and the management team in executing on the group's transformation strategy.
That the business was in a position to both weather the COVID-19 crisis, and emerge as a stronger business, is a credit to Jens and his team. WPP AUNZ will continue to be a strong force in the Asia Pacific region under full ownership by WPP plc.
WPP share price snapshot
The WPP share price rose strongly in December last year and has stabilised since then. It originally surged from 37 to 69 cents per share in the month from November and has remained within 7 cents of that figure since.
