Cooper Tire & Rubber Co. has entered into an accelerated share repurchase (ASR) program with J.P. Morgan Chase Bank N.A. Under the ASR agreement, the company will repurchase an aggregate of $200 million of its common stock.
Cooper will receive approximately 80% of the number of shares to be repurchased at the inception of the ASR program, or approximately 5.6 million shares, based on the closing share price on Aug.6, 2014 ($28.74).
The total number of shares to be repurchased will be determined on final settlement. The number of shares to be delivered at the completion of the program, net of the initial delivery, will be based primarily on the volume-weighted average price of Cooper's common stock during the term of the ASR, less a discount and subject to certain adjustments.
The term of the ASR is scheduled to run from Aug. 7, 2014, until February 2015, and may be shortened at the option of J.P. Morgan. As of July 31, Cooper had approximately 63.6 million outstanding common shares.
"Cooper is in a strong financial position, and the accelerated share repurchase demonstrates our commitment to continuing to deliver value to shareholders," says Roy Armes, Cooper's chairman, CEO and president. "Our board also declared Cooper's 170th consecutive dividend yesterday, and we intend to continue to invest in important growth opportunities to provide increased shareholder value over the long term."
