Abstract
Share repurchases (share buy-backs) have become an increasing global phenomenon, with South Africa (SA) following the international trends since 1999. While there has been a significant amount of international research concerning share repurchases, the same is not true of SA. In addition, there is little research that compares the theoretical reasons given for share repurchases and practice. The objectives to be addressed in this research are thus twofold; first to ascertain the reasons disclosed by company directors for repurchases in order to create visibility of the SA practice, and second to identify the similarities and differences between the reasons for share repurchases in SA and the theoretical reasons, and those emerging from academic literature (in finance theory), in order to contribute to the bridging of the gap between theory and practice. In order to address these objectives, this research uses an archival analysis method to gather data from companies listed on the Johannesburg Securities Exchange Ltd (JSE). Reasons for specific share repurchases given by companies listed on the JSE are then analysed and compared against theoretical reasons using the pattern of behaviour approach. The paper contributes to knowledge by creating visibility of the reasons that influence share repurchases in the SA context. In addition, this research contributes to the closing of the gap between theory and practice by highlighting some of the potential tensions that exist between management and stakeholders in the process of share repurchases. Such tensions, which arise from differences in expectations, have the effect of precluding management from explicitly citing some of the reasons given in finance theory when motivating for share repurchases.