Accelerated Share Repurchase News: A Comprehensive Guide

Accelerated share repurchase is a strategy used by companies to buy back their own shares quickly and efficiently. This approach involves partnering with a bank or investment firm to repurchase a large block of shares within a short period.

Companies like Apple and Google have used accelerated share repurchases to boost their stock prices and reward shareholders. By reducing the number of outstanding shares, these companies can increase earnings per share and make their stock look more attractive to investors.

The accelerated share repurchase process typically involves a company committing to buy back a certain number of shares within a specific timeframe, usually 30 to 60 days. This allows the company to lock in a fixed price for the shares and avoid market volatility.

By using accelerated share repurchases, companies can also avoid the complexities and costs associated with traditional share buybacks. This approach can be more cost-effective and efficient, allowing companies to focus on their core business operations.

Kroger has announced a $5.0 billion accelerated share repurchase program, which will result in the company receiving an initial delivery of approximately 65.6 million shares of Kroger common stock on December 20, 2024.

The program is part of Kroger's efforts to return value to shareholders, with the company also having $2.5 billion of capacity remaining under its share repurchase authorization.

Collegium Pharmaceutical, Inc. has entered into an accelerated share repurchase agreement with Jefferies LLC to repurchase $35 million of the company's common stock.

This agreement is part of Collegium's $150 million share repurchase program authorized by its Board of Directors in January 2024.

Collegium will pay $35 million to Jefferies LLC and will receive an initial delivery of 888,889 shares, representing approximately 80% of the total shares the company expects to repurchase under the ASR agreement.

The final number of shares repurchased will be based on the volume-weighted average prices of Collegium's common stock during the term of the ASR and subject to adjustments related to the terms and conditions of the ASR agreement.

Kroger's accelerated share repurchase program is expected to be settled by the third fiscal quarter of Kroger's Fiscal 2025, while Collegium's ASR is expected to be completed in the third quarter of 2024.

A share repurchase program is a way for a company to buy back its own shares on the open market.

Many companies approve share repurchase programs to buy back their shares over a specified period, usually a year or more, to steadily repurchase shares without affecting the share price.

An accelerated share repurchase speeds up this process by hiring an investment bank to quickly repurchase large blocks of shares.

A company typically approves an ASR when management believes its shares trade at a discounted valuation.

Here are the benefits of an accelerated share repurchase:

Companies like Consolidated Edison have successfully used accelerated share repurchases to return cash to investors. They can quickly buy back a large number of their outstanding shares.

An ASR allows companies to make a significant impact on their share price. This can be beneficial if management believes their shares are undervalued.

Utility companies like Consolidated Edison often use ASRs to quickly return cash to investors. They can do this by repurchasing shares on the open market.

Consolidated Edison's ASR was valued at $1 billion and enabled the company to repurchase 8.7 million of its shares. This is a significant number of shares, especially considering the company made the payment upfront.

The final number of shares repurchased will be based on the volume-weighed average price of the stock during the term. This means the price of the shares will be averaged over a certain period.

The ASR enabled Consolidated Edison to quickly return some of the cash proceeds from its clean energy business divestiture to investors. This can be a smart move for companies looking to return value to their shareholders.

The AZEK Company's $50 million accelerated share repurchase (ASR) program is a strategic move that could have positive implications for shareholders. This program demonstrates management's confidence in the company's financial health and future prospects.

The final number of shares repurchased will depend on the average stock price during the repurchase period, which extends to November 2024. This extended timeline introduces some uncertainty.

Reducing the number of outstanding shares can potentially increase earnings per share and boost stock value. The use of cash on hand for this program suggests strong liquidity.

Investors should consider the opportunity cost of not using these funds for other growth initiatives or debt reduction.