Chinese online game company Shanda (SNDA) says that its board of directors has approved a share repurchase program, effective March 2007 to repurchase up to US$50 million worth of outstanding American Depositary Shares.
"The decision to initiate the share repurchase program illustrates the confidence we have in the long-term value of our company, and reiterates our commitment to maximizing shareholder returns," said Tianqiao Chen, CEO of Shanda. "Given our successful Come-Stay-Pay revenue model, diverse pipeline of new games and rich expansion packs for existing titles, we believe Shanda will have a more prosperous future. Our continuous growth for the past several quarters, the strong profitability of our business and our healthy balance sheet give us the flexibility to invest in a variety of avenues to drive value."
These shares represent the ordinary shares of Shanda from time to time over the next 12 months, depending on market conditions, share price and other factors, as well as subject to the relevant rules under United States securities regulations. Shanda says the repurchases may be made on the open market, in block trades or otherwise and may include derivative transactions. The program may be suspended or discontinued at any time.
The share repurchase program will be funded by the company's available working capital. As of December 31, 2006, Shanda's cash and cash equivalents, short-term investment and marketable securities totaled US$453.9 million.
As of December 31, 2006, the company had approximately 71,604,424 outstanding ADSs representing 143,208,848 ordinary shares of Shanda.