Questions & Answers regarding the Share Buyback Program
Due to the disposal of EADS shares on the one hand and the current and expected results at Mercedes-Benz Cars and Daimler Trucks on the other, the company has an extraordinarily high level of net liquidity of around EUR 13 billion in the industrial business also after closing the Chrysler transaction. Furthermore, the equity ratio of the industrial business exceeded 40% by the end of the year 2007, which is viewed as inefficient by the capital market from a capital-structure point of view. It therefore seems to be reasonable to adapt liquidity to the actual requirements and thus to optimize the company’s capital structure.
By taking this step, we are underscoring the positive perspective for the company and all of its divisions. Both the earnings trend and the cash-flow development are very promising and give us additional scope to shape our future successfully. We also intend to let our shareholders participate in this positive development.
Share purchase price:
Up to 5% above or below the opening price determined in Xetra trading at the Frankfurt am Main Stock Exchange on the day of trading (excluding incidental costs of acquisition).
Total budget:
A maximum of EUR 7.5 billion. (thereof utilized: EUR 3.5 billion in 2007 and further EUR 2.8 billion until March 28, 2008).
Sequences of the program based on the authorization of the Annual Meeting 2007:
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Start: |
August 30, 2007 |
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Interruption: |
December 12, 2007 |
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Continuation: |
February 14, 2008 |
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Finalization: |
March 28, 2008 |
Implementation:
The share buyback program was managed by a bank, which will make its decision on the times of purchase independently and without being influenced by Daimler.
Next steps:
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1. |
Resolution on the authorization of the Company to acquire shares in a volume of up to 10 % of the capital stock existing at the time of the resolution by the Annual Meeting. |
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2. |
Further steps will be taken for the optimization of the capital structure depending on the development of Daimler's cash flows and net liquidity as well as developments in the capital markets. |
A participation in the share buyback is not possible. Also, individual offers to the company are excluded, because the share buyback program will be managed by a bank. Each shareholder who wishes to sell his/her shares, can do so by involving his/her bank or custodian like with every other sale of shares.
We need to preclude the abuse of insider information on the part of the company. Therefore, the share buyback program will be managed by a bank, which will make the buying decisions independently of any instructions from the company.
The benefits of a share buyback program versus a special dividend are as follows:
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Taxation: Most shareholders have to pay taxes on special dividends. In the case of a share buyback program, German private shareholders will only be taxed if they sell their shares at a profit during the so-called speculative period.
In case DaimlerChrysler would distribute a special dividend, the share price after the payout would be reduced in the magnitude of the ex dividend discount. The wealth of the shareholder would not increase. However, as a general rule, the special dividend you be subject to taxation, which would lead to a decrease of the wealth of the . -
Flexibility of timing: After the approval of the buyback, the company can repurchase shares, whereby the buyback and its volumes can be organized flexibly within the timeframe. The share buyback program can also be adjourned or stopped at any time if there is good reason to do so. A special dividend could only be paid out after the Annual Meeting in April 2008.
Yes, the company reports on the development of the share buyback here.
After the termination of the program, corresponding information and a report to the Annual Meeting are required. Furthermore, formal notification of participating interest in the company will have to be made if any disclosure thresholds are exceeded.
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