What is an Accelerated Share Repurchase (ASR) program?

An Accelerated Share Repurchase (ASR) is a program where a company buys back its own stock from financial institutions. The company pays a fixed amount upfront, and in return, receives an initial portion of the shares. The final number of shares repurchased is determined later based on the stock's trading prices over a specific period, with potential adjustments.

Why is Bristol-Myers Squibb initiating a $5.0 billion ASR program?

The ASR program indicates that Bristol-Myers Squibb believes its stock is undervalued or that it has excess capital to return to shareholders. It's a way to efficiently reduce the number of outstanding shares, which can potentially increase earnings per share (EPS) and shareholder value.

When will the ASR program be completed?

The ASR transactions are scheduled to conclude during the second and third quarters of 2022. However, the participating financial institutions have the option to terminate these transactions earlier than their scheduled dates.

What is the immediate impact of the ASR on BMY's share count?

Immediately after the transactions are entered into, BMY pays the $5.0 billion. It receives an initial tranche of shares representing 85% of this amount. The remaining shares are delivered or adjusted for based on the average trading prices over the ASR period.

BRISTOL MYERS SQUIBB CO 8-K SEC Disclosure

Summary

Bristol-Myers Squibb (BMY) announced a significant capital allocation decision through the execution of accelerated share repurchase (ASR) agreements totaling $5.0 billion. This move signals the company's confidence in its stock value and its commitment to returning capital to shareholders. The ASR transactions were entered into on February 8, 2022, following Board approval on December 10, 2021. Under these agreements with major financial institutions, BMY will receive an initial delivery of shares representing 85% of the repurchase price, with the final number of shares determined by volume-weighted average prices. This strategy aims to efficiently reduce outstanding share count and enhance shareholder value, with the ASR transactions expected to conclude in the second and third quarters of 2022.

Key Highlights

1BMY entered into $5.0 billion in accelerated share repurchase (ASR) transactions.
2The ASR transactions were executed on February 8, 2022, with Board approval dating back to December 10, 2021.
3The company is repurchasing its common stock from multiple financial institutions, including Morgan Stanley, Barclays, Citibank, and JPMorgan Chase.
4BMY will receive an initial delivery of shares valued at 85% of the total repurchase price.
5The final number of shares repurchased will be determined by volume-weighted average prices, subject to discounts and adjustments.
6The ASR transactions are scheduled to terminate in the second and third quarters of 2022, but may conclude earlier at the banks' discretion.
7This initiative demonstrates a commitment to capital return and potential shareholder value enhancement.

BRISTOL MYERS SQUIBB CO 8-K Report, Corporate Update (Feb 9, 2022)

Summary

Key Highlights

Frequently Asked Questions