Telkom doesn’t have an impressive track record when it comes to share repurchases. Between 2004 and 2008 it destroyed about R4bn of shareholder value when it spent R5.15bn repurchasing shares at what turned out to be peak prices. Since then it has opted to avoid this tactic, which tends to be of little value for long-term shareholders. So Monday’s announcement that it splashed out R751m buying back 15.8-million shares from mid-November 2017 to mid-February 2018 may have been greeted with some trepidation by shareholders. The repurchased shares are equivalent to 3% of the company’s issued share capital. The average price paid over the period was R47.90 a share, which is below the end-September net asset value of R53.73. Buying back shares at below net asset value is an improvement on the previous repurchase exercise when the share price of the repurchase was substantially more than net asset value. This time it makes a bit more sense but not a huge amount. Share repurchases might be ...
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