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United Therapeutics 8-K Report, Material Agreement (Mar 25, 2024)

Reports
Material Agreements·Regulation FD·Exhibits & Filings
Filing Date
Filed March 25, 2024
Period End
March 25, 2024
Security
UTHR
In the record · 2016–202610-K1110-Q338-K152

UTHR filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 152 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Jun ’18Jun ’18
  2. Change in control8-K · Jun ’20Jun ’20
  3. Leadership change8-K · Jun ’22Jun ’22
  4. Material agreement8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed March 25, 2024. Cited figures are marked; the original filing is the authoritative source.

United Therapeutics Corporation (Nasdaq: UTHR) announced on March 25, 2024 that its Board of Directors approved a share repurchase program authorizing the purchase of up to $1 billiona of its common stock.

The same day, the company entered into an accelerated share repurchase (ASR) agreement with Citibank, N.A. (Citi) to repurchase approximately $1 billionb of stock under that program. Under the ASR agreement, the company makes an aggregate upfront payment of $1.0 billion to Citi and receives an initial delivery of approximately 3,275,199 shares on March 27, 2024, representing approximately 80% of the total shares that would be repurchased, based on the March 25, 2024 closing price.

The final number of shares depends on the average daily volume-weighted average price over the repurchase period, less a discount, and the company may receive additional shares or, in limited circumstances, make a cash payment or deliver shares to Citi at final settlement. Final settlement is expected in the second quarter of 2024 for $300 millionc of the transactions and in the third quarter of 2024 for $700 million. The press release states that the repurchase builds on the company's planned $400 million paydown of its revolving credit facility in 2024, of which $100 million was paid down in the first quarter of 2024.

Chairperson and CEO Martine Rothblatt said the company is confident in its ability to fund future facilities while balancing capital allocation, and described the current valuation of the stock as making repurchases a solid investment. The press release notes approximately 47.1 million shares outstanding as of February 14, 2024.

02—Key points

Key Highlights

  1. Board approved a share repurchase program of up to $1 billion of common stock on March 24, 2024.
  2. Company entered an accelerated share repurchase agreement with Citibank, N.A. on March 25, 2024 to repurchase approximately $1 billion of stock.
  3. Upfront payment of $1.0 billion to Citi, with an initial delivery of approximately 3,275,199 shares on March 27, 2024 (about 80% of the total shares measured at the March 25, 2024 closing price).
  4. Final ASR settlement expected in Q2 2024 for $300 million and in Q3 2024 for $700 million; final share count depends on the average daily VWAP less a discount.
  5. Repurchase follows a planned $400 million revolving credit facility paydown in 2024, of which $100 million was repaid in Q1 2024.
  6. Approximately 47.1 million shares outstanding as of February 14, 2024, per the press release.
  7. Exhibits include the Master Confirmation for the ASR agreement (Exhibit 10.1) and the press release (Exhibit 99.1); Item 7.01 information is furnished rather than filed.

03—Questions

Frequently Asked Questions

  1. How much is United Therapeutics spending on this share repurchase?

    The company is repurchasing approximately $1 billion of its common stock under the ASR agreement, with an aggregate upfront payment of $1.0 billion to Citibank, N.A.

  2. How many shares did the company receive up front?

    The company will receive an initial delivery of approximately 3,275,199 shares on March 27, 2024, representing approximately 80% of the total shares that would be repurchased, measured at the March 25, 2024 closing price.

  3. When will the accelerated share repurchase be finalized?

    Final settlement is expected in the second quarter of 2024 for $300 million of the transactions and in the third quarter of 2024 for $700 million. The final share count depends on the average daily VWAP during the repurchase period, less a discount.

  4. Could the company have to pay cash at settlement?

    Under certain limited circumstances, the company may be required to make a cash payment to Citi. Alternatively, if the company elects, it may deliver shares to Citi. The company may also be entitled to receive additional shares at final settlement.

  5. How does this repurchase relate to the company's debt?

    The press release says the program builds on the company's planned $400 million paydown of its revolving credit facility in 2024, of which $100 million was paid down during the first quarter of 2024.

04—Continue

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