Absolutely correct.

First duty of any Board of Directors is to the shareholders.

If the BoD estimate that:

Selling out in a merger
OR
Buying back shares and giving shareholders capital plus equity back is better than continuing

Then there is a fiscal responsibility to say :

' Here. Take your original money plus more that we made for you. We have done all we can. Take your increased money and re-invest it.'

Mercantillist, Adventurist Capitalism 101 since the first Amsterdam Bourse.

That is how it started off. That is how it works.

And once the BoD have a majority share in control, then they can:

Buy up others.
Award remuneration packages that reflect 'the GMR for execs...'
Close it down
Whatever.

This is just the way it works since the first, returning spice ships were sighted off the Hook van Holland.

Exactly right. There are longer term flexibility issues at stake as well--higher dividend payouts might have to be cut in future down years, and nobody likes that. If buying back stock gives a competitive return on capital, that's what management is supposed to do.

In Australia an off market buyback can be great of shareholders..

I have a share which I brought four months ago for just under AUD $10. The company are offering to buy some or my shares for 14% less than the market price.

This sounds like a looser, but for someone in my situation, I will get a tax rebate from the government so that actually get about $1.50 more than the market price. All 100% legal and well known. The rebate is because the company has paid tax and the shareholders get a credit for this tax.

Not being a dummy, I will offer all my shares - and then will buy them back on market. I will be lucky if the accept 10% of them,