Canon says conditions good for share buy-back

TOKYO, Feb 9 (Reuters) Canon Inc, the world's largest maker of copiers and digital cameras, said on Friday conditions were now more conducive for share buy-backs after it conducted a share split last year.

Canon Senior Managing Director Toshizo Tanaka told Reuters in an interview that paying out a commemorative dividend in 2007 for the Tokyo-based company's 70th anniversary was something he had thought about, although nothing official had been decided.

''We split shares last year, resulting in more outstanding shares. Conditions are a little better now than before (for share buy-backs),'' said Tanaka, who is in charge of Canon's finances.

Share buy-backs along with higher dividends and mergers&acquisitions are among the steps analysts and investors have been expecting from Canon, which is sitting on more than 1 trillion yen (.25 billion) in cash and cash equivalents.

''We will be celebrating our 70th anniversary this year, a milestone year for us ... I'm afraid people would be disappointed if we did not do it,'' Tanaka said, referring to the possible payout of a commemorative dividend.

Canon, which aims for an eighth consecutive year of earnings growth in 2007, said last month it planned to pay 100 yen per share this year in regular dividends.

The company is reaping hefty returns from its top position in digital cameras and colour office machines, and like other exporters such as Toyota Motor Corp. its overseas earnings were boosted by a weaker yen last year.

Tanaka said forming a tie-up or carrying out M&As in the field of organic light-emitting diodes (LED) was one possibility for Canon, which competes with Nikon Corp. in high-end digital cameras and Seiko Epson Corp. in ink-jet printers.

''We are a late starter when it comes to organic LEDs. It will be almost impossible for us to bring the business on track with only our own technology,'' Tanaka said.

He said Canon has no intention of carrying out mergers and acquisitions just to bail out financially troubled firms, but that policy may not necessarily apply to M&As involving TV operations.

Canon is planning to break into the rapidly growing but highly competitive flat TV market with its surface-conduction electron-emitter display (SED) TVs in the final quarter of 2007.

Shares in Canon were up 3.1 percent at 6,360 yen in afternoon trade, outperforming the Nikkei average, which was up 1.24 percent.

REUTERS PV DS1428