US food giant Sara Lee Corp. has reversed its decision to suspend its share buyback programme just a day after it said it would postpone repurchases.
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The company said yesterday (6 November) a fall in the group’s share price means it will buy back stock “on an opportunistic basis”. Sara Lee, however, refused to be drawn on how many shares it would snap up.
The U-turn came amid criticism of the company earlier this week after it said it would suspend its buyback scheme “until market conditions improve”.
According to the Chicago Tribune, one analyst, Morningstar’s Erin Swanson had said the plans to postpone the buyback programme had sent a “mixed message” to investors.
The company, Swanson said, was “trying to convince the markets that its stock is undervalued at the same time it was pulling back” from buying it, the Chicago Tribune reported yesterday.
Shares in Sara Lee were down 6.67% at US$9.52 at the close of trading in New York last night.
