CGI's Board Approves Renewal of Normal Course Issuer Bid to Enhance Shareholder Value

CGI's Normal Course Issuer Bid Renewal

In a significant move to bolster shareholder value, CGI (TSX: GIB.A; NYSE: GIB) has revealed that its Board of Directors has approved the renewal of its Normal Course Issuer Bid (NCIB). This decision is conditional upon receiving the necessary approval from the Toronto Stock Exchange (TSX).

Why the NCIB Matters

CGI's management, alongside its Board, firmly believes that repurchasing its own Class A subordinate voting shares is a prudent use of funds. The NCIB is designed to provide the company with the flexibility to buy back Class A Shares as it sees fit, thereby reinforcing its commitment to enhancing shareholder value. This strategy is particularly relevant given that, as of January 23, 2025, there are approximately 202,607,722 Class A Shares in circulation, of which around 99.68% are owned by the public.

Details of the Renewal

Under the revamped terms of the NCIB, CGI is allowed to repurchase up to 20,196,413 Class A Shares, which equates to about 10% of the company's public float. The shares can be purchased on the open market through TSX, NYSE, and other trading platforms. This initiative will commence on February 6, 2025, and will conclude either on February 5, 2026, or when the maximum allowable shares have been repurchased.

With an average daily trading volume (ADTV) of 324,502 Class A Shares over the past six months, the daily purchase limit set by the TSX will be 81,125 Class A Shares. All repurchases will occur at the market price at the time of acquisition, with the exception of transactions made outside the TSX facilities that comply with exemption orders, which will be at a discount.

Previous Performance and Future Expectations

CGI's current NCIB, active from February 6, 2024, allowed the company to buy back up to 20,457,737 Class A Shares. As of January 23, 2025, CGI reported that it had successfully repurchased 7,088,507 shares at a weighted average price of $145.37 per share, totaling approximately CAD 1,030,487,393.

To facilitate these transactions, CGI will implement an automatic share purchase plan with its designated broker, ensuring that share buybacks can occur even during self-imposed blackout periods. These measures not only signify the company's proactive approach to managing its capital but also display its commitment to maximizing returns for shareholders.

About CGI

Founded in 1976, CGI has established itself as one of the largest independent IT and business consulting services firms in the world. With a workforce of 91,000 professionals globally, CGI offers a comprehensive array of services ranging from IT consulting to managed IT services and business process solutions. The company prides itself on maintaining a localized relationship model bolstered by a global delivery network that supports clients in their digital transformation journeys.

For the fiscal year 2024, CGI reported impressive revenues of CAD 14.68 billion, and its shares continue to be publicly traded on both the TSX and NYSE. The future appears promising as CGI continues to navigate the market and adapt its strategies to meet emerging business needs.

Conclusion

CGI’s NCIB renewal is a strategic move aimed at enhancing shareholder confidence and value. As the company prepares for its upcoming share repurchases, stakeholders will be closely watching its execution of this initiative and its impact on the company’s market position.