Third-party logistics company,
C.H. Robinson Worldwide, Inc.
) has announced an increase in its share repurchase program by 15
million shares. This represents approximately 9.4% of the
company's outstanding shares as of Aug 23, 2013.
This is the second repurchase program of C.H. Robinson in a
year, after the company increased its buyback of shares by 10
million shares in Aug 2012. The company still has 8.7 million
shares left with the previous share repurchase authorization.
Including the current number of shares authorised for share
repurchase, the total stands at 23.7 million.
Out of the total share repurchase value, $500 million will be
an Accelerated Share Repurchase (ASR) Program with JP Morgan
Chase Bank National Association and Morgan Stanley & Co. LLC.
Initially, C.H. Robinson will receive 6,118,882 shares while the
final number of shares will be determined at the completion of
the ASR program.
The share price will be calculated on the weighted average
price of company's common stock during the ASR term minus an
agreed discount. The ASR term is expected to be 4-7 months.
Apart from share repurchase, the company is also borrowing
$500 million from prudential, New York Life and Metlife in a
private placement transaction. The average maturity age of the
debt is 15 years and weighted average coupon rate is 4.28%. The
new debt will expand the company's leverage position.
C.H. Robinson has a rich history of enhancing shareholders'
wealth. Apart from share repurchase, the company has continuously
paid dividends to shareholders for over 25 years. C.H. Robinson's
stock price declined around 6.5% post its second-quarter
financial results, where the company's earnings failed to meet
the Zacks Consensus Estimate.
Currently, C.H. Robinson holds a Zacks Rank #4 (Sell). Other
stocks worth considering in this sector include
P.A.M Transportation Services Inc.
Swift Transportation Co.
). Both PTSI and SWFT currently carry a Zacks Rank #1 (Strong
Buy) while CNW holds a Zacks Rank #2 (Buy).
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