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Equal access share buyback schemes gain popularity, but may lose steam as investor optimism improves

Navene Elangovan
Published Wed, Jan 17, 2024 · 05:00 AM
    • Unlike on-market share buybacks, in which the company is buying shares from any willing seller at market value, an equal access buyback is done through an off-market offer that gives all shareholders an equal chance to tender a portion of their shares at a fixed price.
    • Unlike on-market share buybacks, in which the company is buying shares from any willing seller at market value, an equal access buyback is done through an off-market offer that gives all shareholders an equal chance to tender a portion of their shares at a fixed price. PHOTO: BT FILE

    MORE companies have announced equal access share buyback schemes over the last three years, spurred by low market valuations and fears of a recession.

    However, analysts said the popularity of such buybacks is likely to fizzle out in the near future, given higher interest rates and tighter credit conditions.

    Unlike on-market share buybacks, in which the company would be buying shares from any willing seller at market value, an equal access buyback is done through an off-market offer that gives all shareholders an equal chance to tender a portion of their shares at a fixed price.