Summary
U.S. Bancorp announced on July 24, 2001, that its board of directors has approved a plan to repurchase approximately 56.4 million shares of its outstanding common stock. This share repurchase program is intended to offset shares issued as part of the recently closed acquisition of NOVA Corporation. The company also indicated plans to issue convertible debt securities in the third quarter of 2001 to help finance the NOVA transaction. These actions signal a strategic move by U.S. Bancorp to manage its capital structure following a significant acquisition. The repurchase of shares suggests management's confidence in the company's value and its ability to generate sufficient cash flow. Investors should monitor the execution of both the share repurchase and the convertible debt issuance for their impact on earnings per share and the company's leverage.
Key Highlights
- 1U.S. Bancorp's board approved a plan to repurchase 56.4 million shares of common stock.
- 2The share repurchase is intended to replace shares issued for the acquisition of NOVA Corporation.
- 3The acquisition of NOVA Corporation has officially closed.
- 4U.S. Bancorp plans to issue convertible debt securities in Q3 2001 to finance the NOVA transaction.
- 5Repurchases may occur in the open market or through privately negotiated transactions.
- 6Reacquired shares will be held as treasury stock for future corporate uses.
- 7U.S. Bancorp is a large financial services holding company with over $165 billion in assets.