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Investing.com -- Naturgy Energy Group SA (BME:NTGY) stock tumbled 7% on Tuesday after the Spanish utility announced plans to sell approximately 19.3 million treasury shares, representing about 5.5% of its total stake, in an effort to increase stock liquidity and enable index inclusion.
The offering is expected to price at €25.90 per share, potentially raising around €500 million ($578 million), according to terms seen by Bloomberg.
The company indicated that proceeds from the sale would be used for general corporate purposes.
The share sale appears to be structured as two separate deals that together would boost the stock’s free float.
Naturgy’s decision to increase liquidity comes as the company seeks potential inclusion in major stock indexes, which typically require minimum thresholds for publicly tradable shares.
Investors reacted negatively to the news of the significant treasury share offering, which could potentially dilute existing shareholdings. The stock price decline reflects market concerns about the increased supply of shares becoming available for trading.
Naturgy, one of Spain’s leading energy companies, did not provide additional details about the timing of the offering or specific index targets in the information available.
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