Ford Spending $1.8 Billion on Stock Buyback
Ford Motor Co. plans to spend $1.8 billion as part of a plan to buy back 116 million shares of stock. The repurchase plan is aimed at offsetting potential dilution of the stock.
“These actions are consistent with our overall capital strategy to take anti-dilutive actions and position ourselves to further reduce automotive debt,” said Bob Shanks, Ford’s chief financial officer, in a statement.
The combined share repurchases will reduce diluted shares by about 3%, the company said.
The automaker is looking to offset the affects of two actions looming on the horizon. First, the maker has 4.25% Senior Convertible Notes due Nov. 15, 2016. However, beginning this November, Ford can terminate the conversion rights of the noteholders, which gives them 30 days to convert the notes to shares of stock. The maker is repurchasing 103 million shares to tackle that issue.
Also, the company plans to purchase an additional 12.6 million shares to offset caused by share-based incentive employee compensation for 2014. Ford engaged in similar actions in 2012 and 2013 through open market stock buys.
“The strength of our cash generation gives us confidence to take these actions to enhance shareholder returns,” Shanks said.
Ford reported on April 25 that its automotive operating-related cash flow was $1.2 billion in the first quarter. The company ended the first quarter with automotive gross cash of $25.2 billion, exceeding debt by $9.5 billion, along with a strong automotive liquidity position of $36.6 billion, an increase of $400 million from year-end 2013.
As of April 30, there were 3.88 billion shares of Ford common stock. There are also 70.8 million shares of Ford’s Class B stock, which are owned by members of the Ford family. Ford stock was up slightly to $15.61 in early trading this morning after closing Wednesday at $15.46.
More Industry
Ohio Auto Group Under New Ownership
After 79 years with the Schluter family, Mansfield Auto Group has been acquired by Missouri-based Clement Auto Group.
Read More →
RV Group Expands Carolina Footprint
Blue Compass RV Columbia Northeast is the 13th RV dealership owned by Blue Compass in the Carolinas.
Read More →
Agent Acumen
An Agent Summit panel of people who’ve been supporting auto dealers for years gave both timely and timeless advice for those starting out or mulling the prospect.
Read More →
Missed Maintenance Creates Opportunity
As families get back on the road and into daily school routines, service drives have an opportunity to capture customers who are behind on recommended vehicle maintenance.
Read More →
Mitsubishi Unveils U.S. Plan
The automaker announced a strategy that includes an expanded lineup and dealership presence, along with more ‘rugged’ and electric models.
Read More →
Selling to Grow
The question of whether you should sell your agency and if so, when, is up to you. But it’s a question worth asking to ensure you keep the business on the right path for yourself, employees and clients.
Read More →
Recalled Vehicles Hit 5-Year High
Though the number of events has fallen so far this year, impacted units are up significantly. Meanwhile, regulators consider consumer notification changes.
Read More →
Auto Group Acquires Top-Performing Rooftop
Car Pros sold its Kia Huntington Beach location to Sutherlin Automotive Group, marking the buyer’s third location in Southern California.
Read More →
China as Pacesetter
Automotive leaders huddled on where North America stands in the global picture and how it can strengthen its position against the Asian juggernaut’s surging industry.
Read More →
BMW Concept Car Makes Fuel to Burn
The prototype developed in concert with a South Carolina university engineering team generates more solar energy than it uses in a typical daily commute.
Read More →