It would be difficult to find circumstances more appropriate for a share repurchase than those facing Lewis Stores over the past four months: little or no debt, growing cash balances, a subdued trading environment and, most significantly, a share price trading at almost half of the company’s net asset value. Even critics of repurchases acknowledge that spending R95m to buy back its own shares is probably the best thing Lewis could do to enhance shareholder value. It’s the company’s first repurchase since 2007. So why did its share price slump after the announcement it had fully used its repurchase authority in the four months to end-September? On Monday, Lewis stock dropped a hefty 8% to reach a 10-year low of R27.20. Retail analyst Syd Vianello reckons the market might have been disappointed to learn this buying support is on hold. But that is only until the imminent AGM. On October 17 shareholders will get the opportunity to give the board authority to recharge its purchasing capa...
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