8-KOther Events

GLOBAL PAYMENTS INC 8-K Report, Corporate Update (Apr 14, 2015)

Filed April 14, 2015For Securities:GPN

Summary

Global Payments Inc. (GPN) announced on April 14, 2015, its entry into an accelerated share repurchase (ASR) agreement with Goldman Sachs & Co. This agreement is part of the company's previously approved share repurchase program, signaling a commitment to returning capital to shareholders. The ASR is valued at $100 million, indicating a significant allocation of corporate funds towards reducing outstanding common stock.

Key Highlights

  • 1Global Payments entered into a $100 million Accelerated Share Repurchase (ASR) agreement.
  • 2The ASR is part of the company's previously announced and board-approved share repurchase program.
  • 3An initial delivery of shares valued at approximately $80 million is expected.
  • 4The total number of shares repurchased will be determined by the volume-weighted average price (VWAP) during the repurchase period.
  • 5Final settlement of the ASR is anticipated by June 16, 2015.
  • 6All repurchased shares will be retired, effectively reducing the total number of outstanding shares.

Frequently Asked Questions

An Accelerated Share Repurchase (ASR) is an agreement where a company buys back a significant amount of its own stock from an investment bank (in this case, Goldman Sachs) immediately. The company receives the shares upfront, and the final price and number of shares are settled later based on market prices during a defined period.

The repurchase is part of the company's previously approved share repurchase program. Companies typically repurchase stock to return capital to shareholders, reduce the number of outstanding shares (potentially increasing earnings per share), and signal confidence in their own valuation.

The company is committing $100 million to buy back its stock. The retirement of these shares will reduce the total number of outstanding shares, which could lead to higher earnings per share (EPS) if net income remains constant. The final number of shares repurchased will depend on market conditions during the repurchase period.

The ASR agreement is expected to be fully settled by June 16, 2015. An initial delivery of shares valued at approximately $80 million is expected shortly after the agreement date of April 14, 2015.