Tech giant Yahoo will buy back additional shares worth USD 2 billion as it looks to return more value to shareholders.
In 2013, the US-based company had announced a share repurchase programme worth USD 5 billion.
“On March 26, 2015, the Board of Directors of Yahoo Inc. approved an additional share repurchase programme of USD 2 billion, which will expire on March 31, 2018,” Yahoo said in a regulatory filing on Thursday.
The amount of shares of common stock authorised to be repurchased under the New Repurchase Programme is in addition to the amount remaining under the company’s existing stock repurchase programme announced in November 2013, which expires in December 2016, the filing with US SEC (Securities and Exchange Commission) added.
Market insiders said the exercise is not only to provide more gains to shareholders, but also to shore up the value of its stocks and assure investors about the future growth and stability of the firm.
Share of Yahoo closed on Thursday at USD 47.47 a piece from USD 44.2 on March 25.
Its highest share price closing in the last three months was USD 50.86 a piece on December 26, 2014 and the lowest was USD 42.5 on March 11, 2015.
“As of the date hereof, USD 726 million remains available under the Existing Repurchase Programme. Repurchases under the New Repurchase Programme and the Existing Repurchase Programme may take place in open market or privately negotiated transactions, including without limitation, accelerated share repurchase transactions, derivative transactions and under Rule 10b5-1 plan,” it added.
Last year, the company said its net income attributable to Yahoo Inc. for the year ended December 2014 included a pre-tax gain of around USD 10.3 billion and an after-tax gain of USD 6.3 billion from the sale of its shares in Chinese eCommerce giant Alibaba Group’s IPO in September 2014.
Alibaba’s IPO saw overwhelming demand which helped the firm mop up about USD 26 billion, the biggest IPO so far.
In October 2005, Yahoo had acquired around 46 per cent shares of Alibaba Group in exchange for USD 1 billion in cash, the contribution of the company’s China-based businesses and direct transaction costs of USD 8 million.