Dana Holding Corporation
) announced an accelerated share repurchase agreement (ASR) with
JPMorgan Chase Bank, National Association, a wholly-owned
JPMorgan Chase & Co.
). Under the agreement, Dana will repurchase $200 million of its
outstanding shares from the bank in multiple batches.
The first batch comprising 7.3 million shares will be
purchased at the commencement of the ASR. The remaining shares
are expected to be bought back by the end of 2013. The total
number of shares to be repurchased under the ASR depends on the
purchase price, which will be calculated using the share price of
the averaging period as defined in the ASR agreement.
An ASR is usually used by companies to increase the pace of
share buyback. The agreement is an indirect way of buying back
shares from the open market. Although this results in a higher
price for Dana, the risk associated with the buyback will be
borne by JPM.
Following the repurchase of the initial 7.3 million shares,
Dana's total repurchased shares under its current $1 billion
share buyback program will amount to 34 million for a purchase
consideration of $775 million.
Dana increased the outstanding balance under its share buyback
program to $1 billion in Jun 2013. The company's strong liquidity
position supported this increase.
Maumee, Ohio-based Dana is one of the world's leading
suppliers of driveline, sealing, and thermal technologies, which
improves the efficiency and performance of passenger, commercial
and highway vehicles. Dana currently carries a Zacks Rank #2
Some other stocks worth considering in the auto and truck
American Axle & Manufacturing Holdings Inc.
). Both these companies carry a Zacks Rank #1 (Strong Buy).
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