Bayer CropScience up 5% on share buyback plan

The board will meet on June 6 to consider a proposal for buy back of the company's equity shares.

Bayer CropScience was up 5% to Rs 4,795 on the BSE in noon deals after the agrochemicals company announced a share buyback plan.

“A meeting of the board of directors of the company will be held on June 06, 2017, to consider a proposal for buy back of the company's equity shares, constitution of buyback committee, and appointment of intermediaries in accordance with all applicable provisions of laws,” Bayer CropScience said in a statement.

Buyback is typically used to return free cash flows to shareholders. While a share buyback does not impact a company's business, there is a financial impact to the extent that the cash and the number of shares in its books reduce. As a result, the EPS (earnings per share) goes up.

Since buyback reduces outstanding shares, it boosts earnings per share and, therefore, the share price. In tender offer, the company makes an offer to buy a certain number of shares at a specific price directly from shareholders.

Thus far in the calendar year 2017, the stock had underperformed the market by gaining 8% against 17% rise in the S&P BSE Sensex.