Popular Inc. announces $400M common stock repurchase agreement
Popular Inc. announced today it entered an accelerated share repurchase agreement to buy back some $400 million of its common stock.
Popular previously disclosed in a press release on Jan. 12, 2022, its intention to repurchase up to $500 million of its common stock as part of its planned capital actions for this year.
Under the terms of the ASR Agreement, the corporation today will make an initial payment of $400 million and receive an initial delivery of 3,483,942 shares of Popular’s common stock.
The transaction will be accounted for as a treasury stock transaction, the financial institution said in a press release.
Furthermore, when it receives the initial shares, Popular Inc. will recognize in shareholders’ equity some $320 million in treasury stock and $80 million as a reduction of capital surplus, it confirmed.
When the agreement is finalized, Popular Inc. “expects to further adjust its treasury stock and capital surplus accounts to reflect the final delivery or receipt of cash or shares, which will depend on the volume-weighted average price of the corporation’s common stock during the term of the agreement, less a discount.”
The final settlement of the ASR Agreement is expected to occur no later than the third quarter of 2022, the parent company of Banco Popular de Puerto Rico stated.
Meanwhile, Popular also announced that it expects to execute on the remaining $100 million in common stock repurchases during the rest of the year, in the open market or in privately negotiated transactions.
The timing and exact amount of such additional repurchases will be subject to several factors, including market conditions and the bank’s capital position and financial performance, it noted.
