Kellwood ASR agreement to enhance shareholder value
04 Jan '08
2 min read
Kellwood Company announced that it has entered into a $80 million accelerated share repurchase (ASR) agreement with Bank of America, N.A.
This transaction is consistent with the Company's previously announced long-term financial plans and intended use of proceeds from the anticipated closing of the Smart Shirts sale as set forth on November 6, 2007.
Under the ASR agreement, Kellwood will repurchase $80 million of outstanding common stock, or approximately 18% of its outstanding shares based on Kellwood's current stock price.
The final number of shares to be repurchased under the ASR will be determined at the conclusion of the transaction, based upon the volume weighted average share price of the Company's common shares during the term of the ASR.
Bank of America, N.A. is expected to purchase Kellwood common stock in the open market in connection with the ASR program. The program is expected to take up to 9 months to complete.
"The repurchase of shares is an attractive use of our capital, aligned with our goal of enhancing shareholder value and consistent with our long-term financial plans and 2008 guidance," stated Robert C. Skinner, Jr, chairman, president and chief executive officer.
"We believe that the accelerated share repurchase program serves as confirmation of our strong belief in the future growth prospects of our Company."
Kellwood has repurchased nearly 1.1 million shares of its common stock for approximately $19.8 million under the Company's current repurchase authorization passed by the Board of Directors in September 2007.
The Board of Directors has authorized the investment of up to $90 million of share repurchases, in order to facilitate the ASR program and other possible future repurchases and terminated the prior stock repurchase program announced in September 2007.
The Company will have $10 million of stock repurchase authority after giving effect to the repurchases under the ASR program.