Summary
Marsh & McLennan Companies, Inc. (MMC) announced on August 24, 2007, its entry into an Accelerated Share Repurchase (ASR) agreement for $800 million. Under this agreement, MMC has already paid the full purchase price and received an initial delivery of 21,320,530 shares of its common stock. This initial delivery represents the minimum number of shares guaranteed, based on a 'price cap' provision within the agreement. Further adjustments to the share count are possible. If the average share price over a defined period falls below the cap price, the seller is obligated to deliver additional shares to MMC. The company anticipates that any such additional shares will be delivered by the first quarter of 2008. This ASR transaction indicates a significant capital return to shareholders and a belief by management in the undervaluation of the company's stock.
Key Highlights
- 1Marsh & McLennan Companies (MMC) entered into an Accelerated Share Repurchase (ASR) agreement worth $800 million.
- 2The company has paid the full $800 million purchase price for the ASR.
- 3MMC has received an initial delivery of 21,320,530 shares of its common stock.
- 4The initial share delivery is based on a contractual 'price cap' and represents the minimum number of shares to be repurchased.
- 5The ASR agreement includes a provision for the seller to deliver additional shares if the average share price falls below the cap price.
- 6Additional shares, if any, are expected to be delivered by the first quarter of 2008.
- 7The transaction signals a significant commitment by MMC to return capital to shareholders and potentially boost the stock price.