The appearance of Naver headquarters in Seongnam, Gyeonggi Province. Yonhap News.
Naver announced on the 30th that it will carry out a special shareholder return program by investing approximately 400 billion won by the end of this year to repurchase and retire its own shares.
From October 2 to December 28, Naver plans to repurchase about 1.5% of the total issued shares, which amounts to approximately 2,347,500 shares, and retire them on December 31. Naver stated, “At this point where the stock price has dropped significantly earlier this year, we have decided to acquire and retire our own shares to enhance shareholder value more strongly.”
This program is being conducted using a special dividend from A Holdings, the largest shareholder of Line Yahoo, a joint venture company between Naver and SoftBank in Japan. As Line Yahoo took steps to publicly repurchase its own shares to meet the listing maintenance conditions of the Tokyo Stock Exchange’s first section that will be revised next year (over 35% of outstanding shares), A Holdings participated, sold a portion of its holdings, and distributed it as dividends to Naver and SoftBank. The ownership stake of Line Yahoo held by A Holdings decreased from 63.56% to 62.50%.
Naver explained that this program is separate from the shareholder return policy it announced last year, which is being carried out over a three-year period. In May of last year, Naver announced a new shareholder return program focusing on cash dividends of 15-30% of average consolidated free cash flow, retiring 1% of its own shares annually for three years, among other things.
Recently, Naver’s stock price has been sluggish due to concerns about its growth prospects. On the 27th, the closing price of Naver on the KOSPI was 174,000 won, a decrease of 23.9% compared to the end of last year. Following the announcement of the repurchase of its own shares, Naver’s stock price is trading at 172,000 won, up by 1,600 won from the previous trading day as of 11:15 am on the 30th.