) has landed uncollared accelerated share repurchase ("ASR")
agreements with Deutsche Bank AG (
) and JPMorgan Chase Bank, N.A. - a unit of JPMorgan Chase &
) - to buyback shares worth $750 million. These deals are part of
the chemical maker's earlier announced $1.35 billion share
Ashland expects an immediate delivery of roughly 5.9 million shares
under these agreements. While the agreements extends through Jun
30, 2015, they may be closed earlier based on market conditions and
Ashland recently completed the sale of its Water Technologies unit
to a fund managed by private investment firm Clayton, Dubilier
& Rice for roughly $1.8 billion. The company received around
$1.4 billion in net proceeds from the sale, which it will mainly
use to return capital to shareholders through the $1.35 billion
Under the repurchase program, Ashland bought back over 760,000
shares for $80 million in third-quarter fiscal 2014 (ended Jun 30,
2014). In addition to the $750 million ASR program, the company
also plans to introduce another program that will allow it to
buyback additional shares worth $250 million.
Apart from share buybacks, Ashland will continue to evaluate other
uses of its cash including potential investments in high-return
capital projects, acquisitions and debt reductions.
Ashland's ongoing restructuring initiatives coupled with its cost
savings measures and continued actions to improve its core
businesses will help it to achieve EBITDA margins that rank among
the top 25% of its specialty chemicals peer group.
Ashland is a Zacks Rank #3 (Hold) stock.
LyondellBasell Industries NV (
), which also belongs to the chemical industry, is worth
considering with a Zacks Rank #1 (Strong Buy).
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