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The world's largest smartphone maker will buy
back 1.65 million common shares and 250,000 preferred shares to
stabilise its share price and boost value for shareholders, it
said in a regulatory filing, its second-largest buyback ever.
The buyback is the latest by a major Korean company following
similar action earlier this month by Hyundai Motor Co
<005380.KS> and affiliate Kia Motors Corp <000270.KS>, whose
buyback plans were likewise aimed at enhancing shareholder
value.
Samsung's plan comes amid mounting pressure for the tech giant
to return more capital to shareholders as it heads for its worst
annual profit in three years, dragged down by falling market
share in its smartphone business. The move is also likely to
appease shareholders after a year of declining shares.
Samsung shares are down 12.5 percent in 2014, having recovered
from multi-year lows seen last month, compared with a 1.5
percent decline for the broader market <.KS11>.
The company is also expected to increase dividend payouts this
year to further boost investor sentiment, though Samsung has yet
to specify plans.
The buyback plan comes ahead of Samsung's annual personnel
appointment announcement, which is expected in early December.
Its poor mobile phone performance this year has led to
speculation that major changes may be coming, including the
potential dismissal of the company's mobile division chief J.K.
Shin. Samsung said it does not comment on rumours.
Earlier on Wednesday, Samsung Electronics said it will sell its
stakes in Samsung Techwin Co Ltd <012450.KS> and Samsung General
Chemicals Co Ltd for 761 billion won ($687.98 million) as part
of a broader Samsung Group divestment from defence and chemical
arms.
Samsung Electronics held 66.95 trillion won in cash and
equivalents at the end of the third quarter.
(Reporting by Se Young Lee; Editing by Tony Munroe and
Christopher Cushing)
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