by CIO Staff

CA to Buy Back 41M Shares Amid Restructuring

News
Aug 16, 20062 mins
Mergers and Acquisitions

CA will begin buying back nearly 41 million shares of its stock for US$1 billion on Wednesday, the company said.

The management software maker, formerly known as Computer Associates International, plans to pay between $22.50 and $24.50 per share for the stock, which ended trading on Tuesday at $23.24 per share, up 6.8 percent on the day.

The tender offer comes just a day after the company announced its net profit fell 64 percent in its fiscal 2007 first quarter, which ended June 30. The company also said it planned to slash 1,700 jobs in an attempt to cut costs.

The initial $1 billion stock tender offer is the jump-start of a $2 billion repurchase plan. The tender offer expires on Sept. 14, meaning the shares will have to be tendered by that time. Shareholders have been invited to make offers to the company, with priority given to investors holding fewer than 100 shares. There is no limit to the number of shares a holder can offer to the company for repurchase.

The full stock repurchase offer ends March 31, 2007, which is the end of CA’s 2007 financial year.

CA shares rose 1.5 percent after the tender offer was announced, to close at $23.59 in after-hours trading.

-Dan Nystedt, IDG News Service (Taipei Bureau)

Related Link:

  • CA to Cut 1,700 Jobs; Q1 Earnings Plunge

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