Concerned over the sharp plunge in its share price over the recent past, world's largest mobile player Vodafone on Wednesday said it would buy back shares worth about one billion pounds from the market.
"This action reflects the board's belief that the share price significantly undervalues Vodafone," the company said in a statement, while announcing that the share repurchase programme is being introduced with immediate effect.
The shares of Vodafone, which has lost close to one-third of its value since the beginning of this year, reacted positively to the buyback announcement and were trading with a gain of about 4 per cent at London Stock Exchange in the early morning trade.
"Shares will be purchased on market on the London Stock Exchange in accordance with shareholders approval obtained at the company's AGM in July 2007 and subject to the renewal of that approval at the company's AGM on 29 July 2008," the company said.
The maximum share price payable for any shares would not be higher than 105 per cent of the average of the middle market closing price of the company's share price on LSE for the five business days immediately preceding the trade date on which any shares are purchased.
"Any shares repurchased will be held in treasury," the company said.
The shares were trading 3.5 per cent up at 133.5 pence after rising to an intra-day high of 134 pence early this morning.