Summary
AmerisourceBergen Corporation (now Cencora, Inc.) announced on September 21, 2015, a significant update to its capital allocation strategy through a new $2.4 billion special share repurchase program. This initiative is specifically designed to hedge against the potential dilution from the exercise of warrants issued in March 2013. The company also reported the successful completion of two prior special repurchase programs, totaling $1.65 billion ($1.0 billion authorized in April 2015 and $650 million authorized in May 2014). This aggressive repurchase activity underscores the company's commitment to returning capital to shareholders and managing its share structure in anticipation of future events.
Key Highlights
- 1AmerisourceBergen announced a new $2.4 billion special share repurchase program.
- 2The new program is intended to mitigate the impact of future exercises of warrants issued in March 2013.
- 3This initiative is part of a broader warrant hedging strategy.
- 4The company announced the completion of a $1.0 billion special share repurchase program authorized in April 2015.
- 5The company also completed a $650 million special share repurchase program authorized in May 2014.
- 6Total completed and newly authorized special repurchases amount to $4.05 billion ($2.4B + $1.0B + $0.65B).
- 7The impact of these share repurchases will be excluded from adjusted diluted EPS until warrants are exercised or expire.
Frequently Asked Questions
The primary purpose of the new $2.4 billion special share repurchase program is to hedge against the expected impact of future exercises of warrants that AmerisourceBergen issued in March 2013. This strategy aims to mitigate potential dilution to earnings per share.
Yes, AmerisourceBergen had previously completed two special share repurchase programs: a $1.0 billion program authorized in April 2015 and a $650 million program authorized in May 2014. These programs have been successfully executed.
The company stated that it will exclude the impact of the share repurchases under this new special program, as well as its other special programs, from its presentation of adjusted diluted earnings per share from continuing operations until the warrants are exercised or expire.
Combining the new $2.4 billion program with the previously completed $1.0 billion and $650 million programs, AmerisourceBergen has authorized or completed a total of $4.05 billion in special share repurchases.