SEOUL: Hyundai Motor Co and affiliate Kia Motors unveiled share buybacks worth a combined 670 billion won ($615 million), in an apparent bid to appease investors angered by the sky-high price paid for property to house new headquarters.
Although buyback plans aimed at rewarding employees are common, schemes aimed at enhancing shareholder value are rare for South Korean automakers.
The plans also follow announcements by the companies last month that they will consider paying interim dividends for the first time.
Hyundai Motor's stock jumped 5 percent in morning trade but is still some 20 percent off its value seen before news broke that it, Kia and parts affiliate Hyundai Mobis had bid $10 billion for a new headquarters site in Seoul's high-end Gangnam district, more than triple the appraisal value.
Kia Motors climbed 2 percent and is around 5 percent off levels seen before the Sept. 18 announcement.
"Their shares continued to fall despite dividend plans, which may have led them to come up with share repurchase programs," said Lee Sang-hyun, an analyst at NH Investment & Securities.
Hyundai said it would buy back 449 billion won worth of common and preferred shares, while Kia also said it would repurchase stock worth 220.9 billion won.
The share repurchase programs, which will be completed by Feb. 11, aim "to enhance shareholder value by stabilizing share prices," the companies said in separate regulatory filings.
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