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Indeed Owner’s Shares Jump After Announcing $3.7 Billion Buyback

Indeed Tower in Austin, Texas, US, on Tuesday, June 11, 2024. Indeed Inc. last month announced plans to cut about 1,000 employees, or roughly 8% of its workforce, the job-search website's second culling in two years as it seeks to simplify its business in a cooling labor market. Photographer: Jordan Vonderhaar/Bloomberg (Jordan Vonderhaar/Bloomberg)

(Bloomberg) -- Recruit Holdings Co. rose the most in two months after the company behind the world’s largest employment portal said it would buy back as much as ¥600 billion ($3.7 billion) worth of its own shares. 

The stock rose as much as 4.4% during early trading Wednesday in Tokyo, the most since May 16 on an intraday basis. Recruit said in a statement Tuesday that acquiring its own shares “is the best way to further improve capital efficiency and to maximize shareholder returns.”

ValueAct Capital said in November it had taken about a 1.1% stake in Recruit, which runs job-search site Indeed, and thinks the company is worth twice as much as what it had been trading at. The activist investor has a history of pushing Japanese businesses to boost their value, and conducted a public campaign at convenience store operator Seven & i Holdings Co. last year to call for a strategic review after losing a fight to oust the chief executive. 

Eiji Maeda and Hirofumi Oda, analysts at SMBC Nikko Securities Inc., wrote in a note that they were impressed that Recruit acted quickly to boost shareholder returns after announcing plans to do so in May, and that more may be in store. 

“We see potential for strategic acquisitions and shareholder returns by end-March 2026 using cash on par with or above the current buyback scheme given the firm’s strong cash flow generation capacity,” they wrote.

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