Frozen food giant Nomad Foods has announced that its board of directors has approved a new share repurchase programme of up to $300 million (€268.94 million).
The programme will be based on the company’s closing price of $15.58 per share on 12 March and represents approximately 9% of the company’s market capitalisation.
'A Unique Opportunity'
Commenting on the decision, Noam Gottesman, Nomad Foods’ co-chairman and founder, said, “Recent market dislocations have presented a unique opportunity for us to deploy available capital to generate compelling and accretive returns for our shareholders.
“This authorisation reflects the board’s confidence in the health, growth prospects and free cash flow profile of our business.”
The company also said that acquisitions under the stock repurchase programme may be made from time to time through a combination of open market repurchases, privately negotiated transactions, accelerated share repurchase transactions, and/or other derivative transactions subject to the company's discretion, securities laws, and other legal requirements.
Gottesman added that the share repurchase programme does not preclude the company from pursuing its merger and acquisition agenda.
'Several Potential Transactions'
“We remain actively engaged in several potential transactions and believe we have the financial capacity to both repurchase shares and acquire attractive food businesses while maintaining a prudent leverage profile,” he explained.
The company is likely to enter into Rule 10b5-1 trading plans for the share repurchase programme, which would allow it to repurchase shares at times when it might otherwise be prevented from doing so under certain securities laws.
There can be no assurance as to the amount, timing or prices of repurchases, if any, the company said in its statement.
In addition, the specific timing and amount of repurchases will vary based on market conditions and other factors and the programme may be modified, extended or terminated by the board of directors at any time.
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.