Signet Jewelers enters into accelerated share repurchase agreement with JPMorgan
The Signet board, as previously disclosed, increased its authorized share buyback program by $625 million on August 25, 2016. In connection with today's transaction, Signet has entered into an accelerated share repurchase agreement with J.P. Morgan Securities LLC, as agent for JPMorgan Chase Bank, National Association, London Branch in order to offset the convertible preferred share dilution. Key features of the ASR, which will be funded by the proceeds of the preferred share issuance, are as follows: Signet will repurchase its common shares at an aggregate purchase price of $525 million. The total number of common shares to be purchased ultimately by Signet under the ASR will generally be based on the average of the daily volume-weighted average prices of Signet's common shares during the term of the ASR minus a discount. Signet may receive, or be required to pay, a future price adjustment upon final settlement of the ASR. The price adjustment may be settled in cash or Signet's common shares. The ASR is expected to be completed over approximately three months. The balance of the authorized share repurchases, representing an amount of $100 million, were made by the company on the open market at various points prior to transaction close to offset dilution. Signet's share repurchase activity is expected to result in an EPS-neutral financial transaction. Advisory and consulting fees incurred in connection with the preferred securities were approximately $13 million.