POSCO to buy back shares to fend off takeover

Seoul, Apr 28: POSCO, the world's fifth-largest steel maker, said on Friday it would buy back 900 billion won (3 million) of its shares, or about 4 percent of its common shares, to fend off any potential foreign takeover.

The move comes amid expectations that POSCO, highly profitable and with a fragmented ownership structure, would take shareholder-friendly measures to head off potential hostile takeover bids as the global steel sector consolidates.

But its shares fell more than 4 percent as Beijing unexpectedly raised interest rates, creating worries that demand might slow in South Korea's top export market.

The South Korean steel maker said it would buy back 1.74 million common shares worth 450 billion won by Aug. 1, the company said in a filing to regulators.

In a separate filing, it said it would have National Agricultural Cooperative Federation (NACF), Shinhan Bank and Daegu Bank, buy POSCO common shares worth 450 billion won via trust contracts for one year starting from May 12.

POSCO directly owns 7.1 percent of its shares and 1.04 percent through trust contracts at present, the company said.

The value of the buy-back plan was based on the price of 258,000 won per share.

The stock was down 4.18 percent at 263,500 won by 0503 GMT, dragging the broader market down 2.4 percent.

Shares in POSCO, South Korea's fourth-largest company with the market value of about billion, have surged more than 30 percent so far this year, beating a 2.8 percent rise in the main market, led by takeover speculation.

Reuters