on Thursday offered to buy back up to 20 percent of its share capital two months after defeating a challenge to its defensive shareholding structure.

Jardine said it would buy back up to 100 million shares, or 12 percent of its share capital, in a tender at prices ranging from US$4.80 to US$5.50 per share with proceeds from the sale of British investment bank Robert Fleming.

But the group, dubbed Hong Kong's "Noble House'', said it has an option to buy up to 20 percent if there is sufficient demand, meaning that a total of US$908 million could be returned to shareholders.

Shares in Jardine Matheson surged 10.9 percent or 49 cents to US$5.025 by 1225 GMT in London trade after the announcement, which accompanied its first-half financial results.

The company reported a 32 percent rise in first-half net profit before non-recurring gains and said it expected a return to sustainable profit growth in the full year.

Jardine Matheson said it would shortly receive $960 million in cash and shares from the sale of Robert Fleming to US banking giant Chase Manhattan in April.

Jardine managing director Percy Weatherall told reporters in Hong Kong the tender would enhance shareholder value as a "repurchase offer that allows the shareholder decide whether he wants to remain a shareholder or not''.

Although the repurchased shares would be cancelled, the public float of the company would drop to about 40 percent if the maximum 20 percent of share capital was repurchased, compared with just under 50 percent currently.

The largest stake -- 40 percent -- is held by Jardine Strategic Holdings, in which Jardine Matheson has a controlling 62 percent stake.

Many fund managers blame the cross-shareholding structure, which makes a takeover of the group nearly impossible, for limiting growth in Jardine Matheson's share price.

Controversy over the structure came to a head in the lead-up to Jardine's June 1 annual meeting in Bermuda, where California-based Brandes Investment Partners tabled resolutions that it be scrapped and a single holding company be created.

The resolutions were defeated, but Brandes claimed victory after its proposals won the approval of a majority of independendent shareholders who voted.

Weatherall denied that the tender offer was meant to appease such institutions and give them an exit.

"Our deliberations on how to utilise the proceeds of the Robert Fleming sale have not been influenced by that,'' he said.

Jardine Matheson Finance Director Norman Lyle said the offer would be accretive to the group's net asset value and would make its balance sheet more efficient by raising its gearing.

For the first half, Jardine said net profit, excluding non-recurring items, rose 32 percent to $117 million. The group proposed an interim dividend of 7.8 cents per share.

"We expect full-year results not only to show significant non-recurring gains, but also to mark a return to sustainable profit growth,'' chairman Henry Keswick said in a statement.

Jardine Matheson has seven core businesses -- from supermarkets and motor trading to engineering and property -- focused primarily on the Asia-Pacific region, particularly in Hong Kong, and employing around 150,000 people.

Weatherall was guarded about the recovery's sustainability, and said the company would focus on building foundations for long-term growth in earnings and dividends.

He said the group was reviewing the possibility of seeking a stock listing for its information technology arm, Jardine OneSolution, but declined to offer a timetable.

It also will continue to look at expansion opportunities in markets, such as Indonesia, in businesses related to its current holdings, he said.