Adobe CEO eyes stock buybacks, not big M&As

(Adds share buyback plan)

By Aiko Wakao

TOKYO, April 17 (Reuters) - Adobe Systems Inc. (ADBE.O: Quote, Profile, Research, Stock Buzz) is eyeing share buybacks as a way to spend its cash instead of pursuing large acquisitions like its $3.4 billion purchase of Macromedia, the company's chief executive said on Tuesday.

"The best use of excess cash we think is stock buybacks," Chief Executive Bruce Chizen said in an interview with Reuters in Tokyo. "Our ability to grow is not based on major M&A activity. We will do small M&A, but they tend to be some hundred million dollar deals."

Riding on the success of products such as Acrobat and Photoshop, Adobe generates $200 million in cash every quarter. The company's board this month approved a new stock repurchase plan for up to 20 million shares, and also authorised the spending of an extra $500 million on the existing buyback plan.

The recent changes to the stock repurchase programme are "pretty significant," Chizen said.

Its stock has risen about 15 percent in the past year, bringing its market value to $24.5 billion, as investors have expected its new Creative Suite 3 (CS3) design software, which it started shipping on Tuesday, to be a hit.

And Chizen is confident he can keep ahead of the game amid competition from Microsoft Corp. (MSFT.O: Quote, Profile, Research, Stock Buzz), which this month unveiled online media platform Silverlight, a rival to Adobe's Flash.