Intel Corporation (Nasdaq: INTC), today announced it is entering into accelerated share repurchase (ASR) agreements to repurchase an aggregate of $10 billion of Intel’s common stock.
Following completion of these agreements, Intel will have repurchased a total of approximately $17.6 billion in shares as part of the planned $20 billion share repurchases announced in October 2019.
“We achieved record financial results in the first half of 2020 and raised our full-year outlook as customers rely on Intel technology for delivering critical services and enabling people to work, learn and stay connected. As the ongoing growth of data fuels demand for Intel products to process, move and store, we are confident in our multiyear plan to deliver leadership products,” said Intel CEO Bob Swan. “While the macro-economic environment remains uncertain, Intel shares are currently trading well below our intrinsic valuation, and we believe these repurchases are prudent at this time.”
Under the terms of the ASR agreements, Intel will receive an initial share delivery of approximately 166 million shares, with the final settlement scheduled to occur by the end of 2020. The final number of shares to be repurchased by Intel will be based on the volume-weighted average stock price of Intel’s common stock during the term of the agreements, less a discount and subject to adjustments.
Intel is funding the share repurchases under the ASR agreements with existing cash resources. Strong operating results in the first half of 2020 have contributed to a healthy liquidity balance, which gives Intel the ability to invest in the business during a period of economic uncertainty while also returning capital to stockholders through dividends and these share repurchases. Intel intends to complete the $2.4 billion balance of its planned $20 billion share repurchases and return to its historical capital return practices when markets stabilize.
BNP Paribas Securities Corp. acted as sole structuring adviser to Intel on the ASR agreements.