| Company Name | Ex Date | Purpose | Record Date |
|---|---|---|---|
| SINCLAIRS HOTELS LTD.-$ | 29 Sep 2023 | Buy Back of Shares | 29 Sep 2023 |
What is share buyback?
Share buyback, also known as stock repurchase, is a corporate action where a company buys back its own shares from the market or from its shareholders. This means that the company is using its own funds to purchase some of its outstanding shares, reducing the total number of shares available in the market.
The purpose of a share buyback is often to boost shareholder value by increasing the earnings per share (EPS) and return on equity (ROE). By reducing the number of outstanding shares, the remaining shares become more valuable, which can increase the share price.
There are several reasons why a company may choose to implement a share buyback program:
- To return capital to shareholders: By buying back shares, the company can return excess cash to its shareholders instead of paying dividends.
- To improve financial ratios: By reducing the number of shares outstanding, the company’s earnings per share (EPS), price-to-earnings ratio (P/E ratio), and return on equity (ROE) may improve, which can make the company more attractive to investors.
- To defend against hostile takeovers: By buying back shares, the company can make it more difficult and expensive for a hostile acquirer to gain control of the company.
- To support share price: By buying back shares, the company can provide support for the share price and signal to the market that it believes its shares are undervalued.
Types of Buybacks
There are two types of share buybacks: open-market buybacks and tender offer buybacks. In an open-market buyback, the company purchases its shares on the open market, just like any other investor. In a tender offer buyback, the company makes a public offer to purchase shares directly from its shareholders at a fixed price.
Share buybacks are subject to regulatory restrictions and disclosure requirements, and companies may need to obtain shareholder approval before implementing a buyback program. The decision to implement a share buyback program is typically made by the company’s board of directors, and the program may be announced through a press release or filing with the relevant regulatory authorities.