Hyundai and Kia announce $616 million buyback of shares
Hyundai Motors and Kia Motors have announced that they will be buying back a combined total of ₩670 billion ($616 million) worth of stock after their purchase of a property in Gangnam, an upscale district of Seoul, for nearly three times the property’s assessed price prompted a sell-off of the stocks for both companies.
According to Automotive News, Hyundai will be buying back 2.2 million common shares, as well as 652,019 preferred shared, while Kia will be buying back 4.05 million common shares, both at Monday’s closing prices. The two South Korean automakers announced that the buybacks will be completed by February 11 in order to “stabilize share prices and improve shareholder value.”
“This is a positive, investor-friendly move,” said Bookook Securities analyst Ahn Jong-hoon, as quoted by The Wall Street Journal. “The auto makers are now intent on raising their battered share prices by announcing a series of measures to boost shareholder value. They’re also expected to offer higher dividends.”
“Today’s announcement helps ease concerns that Hyundai may cut dividend payout and is meaningful in that the companies have taken an actual step to improve shareholder value,” said Heo Pil Seok, chief executive officer at Midas International Asset Management, as quoted by Bloomberg. “It will definitely improve investor sentiment and bring up market expectation for an increase in dividend.”