Shares in Glencore (LON:GLEN) have jumped in London in today’s session, as the commodities giant announced plans to buy back shares worth $1 billion. The move comes hot on the heels of news that the group was subpoenaed by the US Department of Justice (DoJ) to produce documents relating to possible corruption and money-laundering.
As of 11:58 BST, Glencore’s share price had added 2.99 percent to 329.00p. The stock is outperforming the benchmark FTSE 100 index which currently stands 0.60 percent higher at 7,618.62 points. Today’s advance comes after the commodities giant’s shares suffered a plunge earlier in the week following news of the DoJ subpoena.
Glencore unveils buyback
Glencore announced in a statement today that it will start a share repurchase or buy-back programme of up to $1 billion in the period to December 31. The commodities giant said that it had entered into an agreement with Citigroup Global Markets to conduct the programme which will be implemented in two stages.
The first part of the programme is starting today and is due to end not later than close of dealings on August 7, the day before the announcement of the group’s half-year results. The maximum aggregate consideration that may be paid for shares during this stage is £350 million.
Analysts weigh in on move
Reuters quoted analysts at Barclays as saying in a note that Glencore’s move did not ‘seem a coincidence’ and suggested that the group’s management also believed that the recent price moves were extreme.
RBC Capital argued earlier in the week that the investment case for the commodities giant had become more uncertain following the US subpoena which refers to the group’s business in Nigeria, the DRC and Venezuela from 2007 to present.