Del Monte buys back 6.2 million shares
June 23, 2010
by Eric Schroeder
SAN FRANCISCO — Del Monte Foods Co. has bought approximately 6.2 million shares of its common stock in connection with an accelerated stock buyback arrangement with Goldman, Sachs & Co. The buyback is part of Del Monte’s three-year, $350 million share repurchase program announced two weeks ago.
“Repurchasing shares is consistent with our confidence in Del Monte’s long-term growth prospects,” said Richard G. Wolford, chairman and chief executive officer of Del Monte Foods. “As we evaluated our alternatives, we concluded that an accelerated stock buyback program was an effective avenue to return value to shareholders. Importantly, we are able to do this while achieving our leverage targets, continuing to invest in our business, and increasing our quarterly dividend by 80%. We feel good, very good about the health of the business and our future.”
As part of the accelerated stock buyback, Del Monte will pay Goldman Sachs $100 million from available cash on hand on June 25 to acquire outstanding shares of its common stock. Del Monte then will receive a substantial majority of the shares expected to be delivered under the buyback on that date.