Tesco, the UK's biggest retailer, has commenced a programme to buy back shares with a value of up to £500 million (€593 million), it said on Monday.
The group had previously announced, when it published its half year results on October 6, that it could afford to start a multi-year share buyback.
At the time Tesco chief executive Ken Murphy denied the buyback was a tactic to ward off private equity bidders.
Rivals Asda and Morrisons have both succumbed to private equity bids this year.
Citigroup To Purchase Shares
Tesco said Citigroup will repurchase shares on its behalf.
'The arrangement allows Citi to repurchase shares, together with any other ordinary shares in the company purchased on the company's behalf, in accordance with the company's current buyback authority granted by shareholders at the company's 2021 Annual General Meeting,' Tesco said in a statement.
'These share purchases will be made on the company's behalf and in accordance with the arrangement and, in the case of any purchases made during closed periods, shall be made independently of and uninfluenced by the company.'
Last month, Tesco reported a 1.2% increase in like-for-like sales at its core UK operations in the first half of its financial year, while group sales were up 3.0% at constant exchange rates.
“We’ve had a strong six months; sales and profit have grown ahead of expectations, and we’ve outperformed the market," chief executive Ken Murphy said at the time.
The group has also recently ramped up its sustainability efforts.