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Why might I want to sell shares back to the company, and why might the company want to buy its own shares?
If you want to sell shares - for example, because you are retiring or have had a dispute with other shareholders - selling them to the company may be your best option. For example, existing shareholders might not be able to afford to purchase your shares, or you simply might not want to deal with each other.As far as the company is concerned, purchasing its own shares may be a sensible way of using spare cash or of adjusting its gearing (the level of borrowings compared to shareholders' funds). Public or larger private companies may also wish to purchase shares to increase the value of the remaining shares, to increase the dividends each remaining share gets, and to help maintain a healthy market in the shares.
