Royal Dutch Shell, Europe's largest oil company, said today it will repurchase an unspecified amount of its Class ''B'' shares, which the company said will be canceled. It is less economic for the Company to purchase A ordinary shares under the share buy-back program due to Dutch dividend withholding tax rules, the company said in a statement.
Shell (RDS-A) said the purpose of the share buy-back program is to offset dilution created by the issuance of shares for the company's Scrip Dividend Program, the Wall Street Journal reported. The Class ''A'' shares of the Anglo-Dutch oil giant traded in New York are down 8.5% year-to-date.
The recent tumble experienced by global equity markets has prompted speculation that large companies would initiate more or add to existing share repurchase programs in an effort to send a signal to wary investors that their shares are undervalued.
U.S. companies authorized $36 billion in share buybacks last month, bringing the total for 2011 to $324 billion, which compares to $222 billion through the end of July 2010, Bloomberg News reported.