Shares in Toshiba (TYO:6502) jumped on Wednesday on the announcement of a share buyback plan worth around 700 billion yen.
The share buyback was designed to fulfill the promise made to its investors to share some of the profits made from the $18 billion sale of its memory chip business.
The group finalised the sale of the memory business to a consortium led by Bain Capital earlier this month. The deal came as a relief to investors, after financial struggles driven by the doomed Westinghouse nuclear business meant the company came close to delisting.
The scale of the buyback exceeds what some in the market expected, which was around 600 billion yen. The timing of the announcement is earlier than we had expected, so the first impression is positive,” Mizuho Securities analyst Takeshi Tanaka said in a note to clients.
Shares rose around 11 percent when the news was released, and are currently trading up 6.65 percent at 337JPY (0901GMT).
