BRAMPTON, ON - Loblaw Companies Limited has announced that the Toronto Stock Exchange (TSX) has accepted a notice filed by Loblaw of its intention to make a normal course issuer bid (NCIB), potentially signaling the company may repurchase as much as $1.2 billion worth of its own stock.
According to a press release, the TSX filing allows Loblaw the option to purchase up to 21,401,867 of its own Common Shares during the 12-month period commencing April 28, 2016 and terminating April 27, 2017. This represents approximately 10% of the public float, by way of a NCIB on either the TSX or through alternative trading systems or as permitted by the TSX or under applicable law.
The company maintained that as of April 18, 2016, Loblaw had 407,421,728 outstanding Common Shares, and based on the average daily trading volume of 611,683 during the last six months, daily purchases will then be limited to 152,920 Common Shares, other than block purchase exceptions.
As of 4:00 PM EDT on April 27, Loblaw’s stock price was at $70.31 CAD, or $55.84 U.S.. If the maximum amount of shares were repurchased by Loblaw at this price, the result would be $1.504 billion CAD, or $1.195 billion U.S..
As the release continues, purchases of Common Shares will be made in open market transactions on the TSX or through alternative trading systems, and Loblaw may enter into forward purchase or swap contracts in connection with Common Shares which may be settled by physical settlement, cash settlement or a combination thereof. Loblaw may also purchase Common Shares through private agreements or share repurchase programs if it receives an issuer bid exemption order in the future permitting it to make such purchases.
Loblaw noted that decisions regarding the timing of future purchases of Common Shares will be based on market conditions, share price, and other factors, and it may elect to suspend or discontinue its NCIB at any time. Common Shares purchased under the NCIB will be cancelled or used in connection with the settlement of restricted share units or performance share units.
AndNowUKnow will continue to update you on this potential major buyback plan as more details are revealed.
