Acer announces plans for a third share repurchase

By Kevin Chen  /  Staff reporter

Tue, Jul 03, 2012 - Page 14

Acer Inc (宏碁), the world’s fourth-largest PC brand, announced yesterday its third share repurchase plan in two years in a bid to increase earnings per share for shareholders, which in turn would help boost share prices.

The company said it planned to buy back 10 million common shares, or 0.35 percent of total outstanding shares, according to a filing with the Taiwan Stock Exchange.

Acer said it proposed to spend up to NT$60.41 billion (US$2.02 billion) on the buyback plan and that it would then transfer the repurchased shares to its employees to retain the talent needed for future growth.

The company will repurchase shares at between NT$28 and NT$35 each from today until Sept. 2 on the open market, according to the filing.

Acer shares closed 0.32 percent higher at NT$30.9 before the announcement of the share buyback. The stock has dropped 11.97 percent so far this year, compared with the TAIEX’s 3.86 percent rise.

BNP Paribas analyst Laura Chen (陳佳儀) said in a client note on Sunday that she expected the target share prices for Acer to be NT$30 over the next 12 months, dragged down by weaker-than-expected shipment growth in notebook computers.

Last year, the company exercised two share buyback schemes to support its share price. From April to May last year, Acer bought back 28.62 million shares at NT$53.349 each and repurchased 27 million shares at NT$49.69 a share from June to July, company data showed.

For the whole of last year, the company's losses stood at NT$6.62 billion, or a net loss of NT$2.52 per share, mainly because of a US$150 million write-off in the second quarter to clear inventory in its European operations.

Companies in the technology sector have seen depressed share prices recently because of market concerns about the business outlook in the third quarter amid continuing global economic uncertainties.

On Friday, passive components producer Ralec Electronics Corp (旺詮) said its board had agreed to spend as much as NT$1.57 billion to buy back 2 million common shares at between NT$22 and NT$42 a share from Saturday to Aug. 29, while Alpha Networks Inc (明泰科技), a local producer of networking products and digital products, said on Monday last week that its board had agreed to spend as much as NT$4.58 billion to buy back 15 million common shares at between NT$15.26 and NT$34.38 each from that day through Aug. 24.

The other companies to announce buyback plans were LCD module supplier Ampire Co (晶采光電), local area network hardware producer Cameo Communications Inc (友勁科技) and Megawin Technology Co (笙泉科技), which produces microcontollers for consumer electronics and networks.