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

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.