Summary
This 8-K filing from The Allstate Corporation, dated March 21, 2014, announces the execution of an accelerated share repurchase (ASR) agreement with Barclays Bank PLC for $750 million of its common stock. This ASR is a significant component of Allstate's previously announced $2.5 billion repurchase program. The majority of the shares are expected to be delivered to Allstate at the inception of the agreement, with the final price and number of shares determined based on the weighted average price during Barclays' market purchases over a period not exceeding four months.
Key Highlights
- 1Allstate entered into an accelerated share repurchase (ASR) agreement to buy back $750 million of its common stock.
- 2The ASR is part of a larger $2.5 billion share repurchase program announced earlier by the company.
- 3The majority of the repurchased shares are expected to be received by Allstate immediately upon entering the agreement.
- 4Barclays will purchase the shares in the market over a period of up to four months.
- 5The final purchase price and number of shares will be determined by the volume-weighted average price during Barclays' purchasing period.
- 6Allstate may elect to settle any final payment in cash or additional shares.
- 7Acquired shares will be held in treasury.
Frequently Asked Questions
An accelerated share repurchase (ASR) agreement is a transaction where a company agrees to buy back a substantial amount of its own stock from a financial institution, such as a bank. The company typically receives a majority of the shares upfront, and the final cost and number of shares are determined later based on market prices over a specified period.
This $750 million ASR is a significant part of Allstate's broader $2.5 billion share repurchase program announced on February 19, 2014. It demonstrates the company's commitment to returning capital to shareholders by reducing the number of outstanding shares.
By repurchasing shares, Allstate will reduce the total number of its outstanding common shares. This typically leads to an increase in earnings per share (EPS) as the same net income is divided by a smaller number of shares, assuming other factors remain constant.
The final number of shares repurchased will be determined after Barclays completes its market purchases, which is expected to occur within a period not exceeding four months from the agreement's inception. The price will be based on the volume-weighted average prices during that period.