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Lexmark Launches $30M Accelerated Shares Buyback With Citibank
Lexmark (NYSE:LXK) will buy back $30M worth of shares (1.2% of shares outstanding) through an accelerated repurchase agreement (ASR) with Citi. (8-K).
The deal requires Citi to "deliver 624,235 shares to [Lexmark] on January 30, 2015, equal to 85 percent of the shares that would be repurchased at a price of $40.85, the closing price of [Lexmark's] Class A Common Stock on January 27, 2015."Lexmark spent $80M on buybacks in 2014. News of the ASR comes with Lexmark less than $3 away from a 52-week low of $37.37.
Item 8.01. Other Events.
After the close of the markets on January 27, 2015, Lexmark International, Inc. (the "Company") entered into an accelerated share repurchase agreement ("ASR Agreement") with Citibank, N.A. ("Citibank"). Pursuant to the terms of the ASR Agreement, the Company will purchase $30 million of the outstanding shares of its Class A Common Stock from Citibank. Under the ASR Agreement, Citibank will deliver 624,235 shares to the Company on January 30, 2015, equal to 85 percent of the shares that would be repurchased at a price of $40.85, the closing price of the Company's Class A Common Stock on January 27, 2015.
The number of shares to be delivered to the Company by Citibank under the ASR Agreement shall be adjusted based on a discount to the average of the daily volume weighted average price of the Company's Class A Common Stock during the term of the ASR Agreement. If the number of shares to be delivered to the Company is less than the initial delivery of shares by Citibank, the Company may be required to remit shares or cash to Citibank as a result of such adjustment. The share repurchases are expected to be completed during the first quarter of 2015.
After entering into the transaction described above, the Company now has approximately $59 million of share repurchase authority remaining.
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