8-KOther Events

ALLSTATE CORP 8-K Report, Corporate Update (Mar 20, 2015)

Filed March 20, 2015For Securities:ALLALL-PJALL-PBALL-PHALL-PI

Summary

This 8-K filing from The Allstate Corporation, dated March 19, 2015, announces the company's entry into an accelerated share repurchase agreement (ASR) with Goldman, Sachs & Co. for $500 million of its outstanding common stock. This ASR is a component of a larger $3 billion share repurchase program that was initially announced on February 4, 2015. Investors should note that the majority of the shares under this agreement will be acquired by Allstate at the agreement's inception, with the final number of shares based on market purchases by Goldman Sachs over a period not exceeding three months. The pricing mechanism will involve the average daily volume-weighted average prices during Goldman's purchase period, with potential settlement flexibility in cash or shares if additional amounts are due. The shares repurchased will be held in treasury.

Key Highlights

  • 1Allstate entered into a $500 million accelerated share repurchase agreement (ASR) with Goldman, Sachs & Co.
  • 2The ASR is part of a broader $3 billion share repurchase program announced on February 4, 2015.
  • 3The majority of shares repurchased under the ASR are expected to be delivered to Allstate at the agreement's inception.
  • 4Goldman Sachs will purchase shares in the market to fulfill its delivery obligations within a three-month timeframe.
  • 5The final number of shares and price will be determined by the average daily volume-weighted average prices during Goldman's market purchases.
  • 6Allstate has the option to settle any remaining obligation in cash or additional shares.
  • 7Acquired shares will be held in treasury.

Frequently Asked Questions

An accelerated share repurchase agreement is a transaction where a company buys back its own stock from an investment bank (in this case, Goldman Sachs). The company typically receives a substantial portion of the shares upfront, and the final number of shares repurchased is determined later based on market prices during a specified period.

The filing indicates this $500 million ASR is part of a larger $3 billion repurchase program. Companies often repurchase shares to return capital to shareholders, reduce the number of outstanding shares (potentially increasing earnings per share), and signal confidence in the company's financial health and future prospects.

The final purchase price per share and the total number of shares received by Allstate will be based on the average of the daily volume-weighted average prices of Allstate's common stock during the period Goldman Sachs makes its market purchases. This means the exact number of shares Allstate will ultimately receive is not fixed until the end of the repurchase period.

If the market purchases by Goldman Sachs result in a higher average price than initially contemplated, Allstate may owe a settlement amount. The company has the flexibility to settle this amount using either cash or additional shares of its common stock.