Microsoft Shares Rise on $30 Billion Buyback

July 21 (Bloomberg)-Shares of Microsoft Corp., the world's largest software maker, rose as much as 6.7 percent in Europe after the company said it will distribute more than $75 billion to shareholders over the next four years.

The stock rose as much as $1.89 to $30.21 in Frankfurt from the $28.32 close in the U.S. yesterday. Redmond, Washington-based Microsoft yesterday said it will buy back as much as $30 billion in stock over four years, spend $32 billion on a one-time $3-a- share dividend, and double its annual dividend.

Chief Executive Steve Ballmer and the Microsoft board approved the plan to return some of the company's $56.4 billion in cash after a board meeting via telephone yesterday morning, Chief Financial Officer John Connors said in an interview. The distribution, the largest ever in the U.S., may buttress a share price that's fallen 50 percent from its 1999 peak. The 29-year- old company may also post its slowest sales growth this year.

``It's been a long time coming,'' said Tim Allen, who helps manage $5.8 billion and owns Microsoft shares at Wentworth, Hauser & Violitch in Seattle. ``It's nice that they recognized that they are getting older and that shareholders can make better use of this money than they can.''

Microsoft stock had its best performance in six quarters in the period ended June 30 as investors bet the company would step up its buyback program and increase its dividend. The value of the plan exceeded most analyst estimates.

Richard Sherlund, an analyst at Goldman, Sachs & Co., and Charles Di Bona at Sanford C. Bernstein & Co., both in New York, had estimated the buyback could be as much as $40 billion and the dividend increased. Heather Bellini at UBS Securities Inc. estimated the company would spend $15 billion to $25 billion.