MUNICH (03/10/2000) - SAP AG plans to undertake a three-for-one stock split, a move which it said today will make its shares available to a wider audience in the capital markets.
The Walldorf, Germany-based software vendor's top management also plans to ask its shareholders at its upcoming shareholders meeting to authorize SAP to raise capital of up to 25 million euros (US$24.2 million), SAP said in a statement today.
The announcements come ahead of SAP's annual shareholder meeting, to be held in Mannheim, Germany, on May 5.
To carry out the stock split, SAP will have to transfer 46.46 million euros on its balance sheet from revenue reserves to subscribed capital, SAP said. That is because the nominal value of its stock is actually 2.56 euros, an amount which cannot be easily split, according to Stefan Gruber, an SAP spokesman.
SAP also cited the need to finance its rapidly growing activities in Internet-based business-to-business activities as one reason for the proposed permission to raise capital. Gruber stressed that this step is only an authorization to raise capital, rather than an announcement that SAP will definitely raise the capital.
The move gives SAP the ability to respond quickly to "strategic options," in its core markets, SAP said.
"This gives us more flexibility in the future," said Gruber.
The capital increase will be carried out through the issuance of preferred shares, for which SAP can receive either cash or equity participation in companies, SAP said. The authorization for the capital increase expires on May 1, 2005.
SAP today also said it will continue to pay shareholders a dividend. SAP's Supervisory and Executive Boards will ask shareholders to approve an unchanged dividend of 1.57 euros per common share and 1.60 euros per preferred share.
"SAP continues its dividend policy of giving shareholders the chance to share in the success of the company," SAP said, About 30 percent of the company's 1999 annual net income will be distributed in the dividend, SAP said.
SAP's shares are listed on the Frankfurt Stock Exchange, and as American Depository Receipts (ADRs) traded on the New York Stock Exchange. An ADR is a certificate issued in the U.S. representing a portion of a share in a non-U.S. company.
SAP, in Walldorf, Germany, can be reached at +49-6227-747474, or at http://www.sap.com/.