Google plans a stock buyback but few takers are expected

August 05, 2004|By BLOOMBERG NEWS

WASHINGTON - Google Inc., which runs the world's most-used Internet search engine, said yesterday that it is offering to buy back 23.2 million of its own shares at a discount to the price it expects for its initial public offering.

The company is offering to buy back stock held by 1,105 employees, former employees and consultants, Google said in a filing with the U.S. Securities and Exchange Commission. Google said it's required to offer to repurchase the shares because they weren't registered under U.S. or state securities laws.

Google said it will repurchase the shares at prices ranging from 30 cents to $80 each, plus interest of as much as 10 percent annually since shareholders bought them. That's less than the minimum price of $108 a share that Google said it expects to sell shares to the public this month. Few shareholders are likely to sell, analyst Marianne Wolk said.

"If investors were able to sell vested shares at a higher IPO price, they're more likely to do so," said Wolk, who follows Internet search companies at Susquehanna Financial Group in New York.

Google is also offering to repurchase unexercised options to buy 5.59 million of its shares. The company said it will pay 20 percent of the price at which the options can be exercised.

One holder of more than 5 percent of Google's stock who is eligible to have some shares repurchased said he won't participate, the SEC filing stated.

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