Share Performance of UK Open Market Share Repurchases

We examine long run firm performance following UK open market share repurchases announced between 1999 and 2004. We find the long run abnormal share performance among UK repurchasing firms after the initial announcement. The mean two-year abnormal buy-and-hold returns of small firms and value firms which are likely to suffer from share undervaluation are respectively 58.66% and 15.86%. However, we find inconsistency in the long run excess returns after controlling for size and book-to-market. In particular, size and book-to-market ranks are not correlated to the long run excess returns. The long run abnormal returns are not higher among firms buying back more shares. Overall, the results suggest that UK open market share repurchases might contain different information