IBM plans a $5bn buyback

City A.M. Reporter
IBM said yesterday it plans to spend another $5bn (&pound;3.1bn) on share repurchases, boosting its total outstanding stock buyback programme to $9.2bn in a reflection of its strong cash flow.<br /><br />IBM said it will repurchase shares on the open market or in private transactions, depending on market conditions. It also said it expects to request approval for additional share repurchase authorisation at its April board meeting.<br /><br />Shares of the US computer giant rose as much as 1.7 per cent after the announcement, which analysts said was good for shareholders although not entirely a surprise. The stock eventually closed 0.45 per cent up at $120.65. The buyback would add to around $4.2bn remaining at the end of September from a previously approved plan, with the total amount representing around 5.9 per cent of its total share capital. <br /><br />Some analysts said the large buyback was possible as IBM has not been as acquisitive as some of its tech peers, such as Cisco Systems or Oracle. But they also said the move does not prohibit future deals.<br /><br />IBM generated $3.4bn in free cash flow in the third quarter, ending the period with $11.5bn of cash on hand.<br /><br />The firm has returned $73bn to shareholders since 2003.