8-KOther Events

GLOBAL PAYMENTS INC 8-K Report, Corporate Update (Feb 10, 2021)

Filed February 10, 2021For Securities:GPN

Summary

Global Payments Inc. (GPN) announced on February 10, 2021, the initiation of an accelerated share repurchase (ASR) program amounting to $500 million. This ASR is part of the company's broader, previously authorized share repurchase plan. The primary objective of this initiative is to return capital to shareholders by reducing the number of outstanding shares and potentially boosting earnings per share. Investors should note that a significant portion of the repurchase, approximately 2 million shares, is expected to be completed by February 12, 2021, with final settlement anticipated by March 31, 2021. The repurchase price will be determined by the volume-weighted average price of GPN's stock during the repurchase period, including a discount. This move signals management's confidence in the company's valuation and its ability to generate free cash flow.

Key Highlights

  • 1Global Payments Inc. (GPN) has entered into a $500 million Accelerated Share Repurchase (ASR) program.
  • 2The ASR is part of an existing, board-approved share repurchase program.
  • 3Approximately 2 million shares are expected to be repurchased and received by February 12, 2021.
  • 4The ASR program is set to conclude with final settlement no later than March 31, 2021.
  • 5The repurchase price will be based on the average daily volume-weighted average prices during the repurchase period, less a discount.
  • 6This action indicates a commitment by management to return value to shareholders.

Frequently Asked Questions

An Accelerated Share Repurchase (ASR) is a program where a company buys back a significant amount of its own stock from an investment bank. The company typically pays the investment bank an upfront amount, and the bank agrees to deliver shares to the company shortly after. The final number of shares repurchased is usually determined later, based on the market price of the stock over a specified period.

The company is repurchasing shares as part of its strategy to return capital to shareholders. This can also serve to reduce the number of outstanding shares, potentially increasing earnings per share (EPS) and signaling management's belief that the company's stock is undervalued.

The number of shares repurchased under the ASR will be determined based on the average of the daily volume-weighted average prices of Global Payments' common stock during the repurchase period, less a discount. The exact number of shares is subject to adjustments based on the terms of the ASR agreement.

Approximately 2 million shares are expected to be received by the company on February 12, 2021. The final settlement of the entire $500 million ASR program is expected to occur no later than March 31, 2021.