Buffett-Backed Mitsui Plans $1.3 Billion Share Repurchases

Buffett-Backed Mitsui Plans $1.3 Billion Share Repurchases
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(Bloomberg) — Warren Buffett-backed Mitsui & Co. said it would repurchase as much as 200 billion yen ($1.3 billion) worth of shares after asset sales helped offset weaker annual profits.

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Mitsui plans to buy back as many as 40 million shares between May 2 and Sept. 20, according to a Wednesday statement. The company also announced a 2-for-1 stock split, effective from July, as it aims to lower the cost of its shares to attract smaller investors.

The company’s shares closed 1.1% lower in Tokyo trading after earlier rising on the news, trimming an advance this year to 43%. Buffett’s Berkshire Hathaway Inc. holds about 8.3% of the trading house, according to data compiled by Bloomberg.

Sales of assets including Indonesian utility PT Paiton Energy, bolstered Mitsui’s ability to deliver shareholder returns, President Kenichi Hori told reporters in a briefing.

The Japanese yen has plummeted to the lowest level in three decades against the dollar, due to interest rate differences between Japan and the US and elsewhere. Japanese trading houses, which have sprawling businesses abroad including overseas oil and gas assets, typically benefit from a weaker yen.


Why the Yen Is So Weak and What That Means for Japan: QuickTake

“A stable exchange rate is better for business management,” Hori said. Mitsui sees an impact of 3.4 billion yen for every 1 yen change against the dollar.

Mitsui sees little risk of losses in the current fiscal year from issues with the Arctic LNG 2 energy project in Russia, which was sanctioned by the US last year. The company, which holds a stake through a consortium with Jogmec, is monitoring the situation carefully, according to Hori.

(Updates throughout with comments, share moves)

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