Samsung looks at buyback plan

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Samsung looks at buyback plan

Samsung Electronics said in a regulatory filing on Thursday that it is considering various measures, including buying back its shares, to return some value to shareholders.

“Samsung Electronics is reviewing diverse measures all the time to enhance shareholder value as part of its management policies prioritizing shareholders, but nothing in detail has been confirmed at this moment,” the filing said. “We will post a filing again by the time any details are determined or within a month.”

Samsung C&T, an affiliate of Samsung Electronics, said in a separate filing Thursday that it is not considering retiring its shares. The filings were made hours after the Korea Exchange demanded earlier in the morning that both companies clear rumors and news reports by 6 p.m.

The Korea Economic Daily reported on Wednesday that it is likely the world’s No. 1 smartphone producer would announce, when unveiling the third-quarter earnings results on Oct. 29, that it would buy back issued shares from existing shareholders and cancel part of the securities or the entire volume.

The act of canceling the treasury stocks would send a message to investors that the company is handing out its excess cash. The size of the buyback could be the biggest in history, the report also forecast. Samsung Electronics currently has cash of $55 billion to shell out.

The news report also said other affiliates under the Samsung umbrella - such as Samsung Fire, Samsung C&T, Samsung SDS and Hotel Shilla - would introduce measures to enhance shareholder value that include boosting dividends, as they are scheduled to release their third-quarter performance next week.

The speculation comes as the electronics giant, whose revenue accounted for 14 percent of Korea’s gross domestic product last year, has seen its stock prices faltering this year, disappointing shareholders.

Although the shares sharply rebounded after Samsung beat analyst consensus in a third-quarter earnings guidance unveiled on Oct. 6, the share price is still more than 3.8 percent down from the level at the beginning of this year. Compared to this year’s high of 1,510,000 won ($1,330), the closing price for Thursday at 1,280,000 won is 15 percent lower.

The company bought back $2.15 billion of its shares in January, its first such move in seven years. Treasury stocks account for 12.2 percent of Samsung Electronics’ total shares.

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