BuyBack

Buyback its not exclusively related to takeover defense. It's usual for any company to buyback outstanding shares if prices are low. Something natural, and is a common task of a corporation treasury desk. Whenever there's a high demand for more shares, and its quotation is high and sustained, company usually issue shares. This way, increasing the outstanding amount of some company shares. In event of bull market, it can be more than a need, once the existing shares valuation can skyrocket.

The opposite situation also need proper response. In bear market, prices are usually low, in general. Huge quantity of some company outstanding shares does not make sense. If let by itself, prices can decline even more, making this a stability matter in fact. A low spiral is dangerous, once some absurd situations can occur as well they happen in highs. If for spot market a consider low quotation deserve some attention, even more when considering derivatives and future markets.

For what it does matter, it can put a corporation on verge of some takeover. Lows can affect corporations in general, and the entire stock exchange blue chips. As well for raiders. Problem today is that world lives a globalization age, for banking also. In this exact moment, maybe some foreign stock exchange can be experiencing a isolated high, specific for that area. Then, a raider may appear not from a local or national area, but from a worldwide arena.

Treasurers manage share prices of the company regulating its quantity over the stock market. Its also a traditional takeover defense, trying to keep share prices under some control. As long as far the best defense against hostile takeover is high shares value. Reducing outstanding quantity of some company shares in the stock market, can push toward a valuation of the shares available.

Furhter text:

Redemption of shares As an operation to concentrate corporation shares and keep them properly priced