Naver headquarters building in Seongnam, Gyeonggi Province (Yonhap)

South Korean portal giant Naver announced Monday it will buy back and cancel shares worth 400 billion won ($306 million) by the end of the year to boost its declining stock value.

The latest measure will be separate from the ongoing shareholder return policy the company introduced in 2023, spanning three years.

“From Oct. 2 to Dec. 28, we will repurchase about 2,347,500 shares which accounts for 1.5 percent of the total issued shares, and cancel them by Dec. 31," Naver said.

"Given the significant decline in stock price this year, the board has decided to buy back and cancel the stocks to further enhance shareholder value in addition to the dividend-focused shareholder return program we have implemented."

The company has been witnessing its share price fall about 15 percent on-year. On Friday, Naver closed at 170,400 won.

According to Naver, the new shareholder return program will be financed using special dividends from A Holdings, the joint venture Naver established with SoftBank in March 2021. The two companies each own 50 percent stakes in A Holdings.

A Holdings has secured the special dividends from selling its shares of LY Corp. in August, in order to comply with the Tokyo Stock Exchange’s revised listing requirements, Naver explained. The new regulation mandates a minimum public float of 35 percent.

Naver underscored that while A Holdings' stake in LY Corp. edged down from 63.56 percent to 62.5 percent, the company still holds firm of its control over LY Corp.

In May 2023, Naver introduced a new shareholder return program that includes distributing 15 to 30 percent of the average free cash flow over two years as cash dividends and canceling 1 percent of treasury shares annually over a three-year period.

Under the program, Naver distributed 119 billion won in dividends this April, and canceled 1 percent of the total issued shares in August.

"Naver will continue to maintain a strong finance position and actively reinvest profits in core areas to promote growth," Naver said.

The company said it will also continue to explore new shareholder return strategies that align with the latest policy trends and movements in the domestic and global capital market.