Diageo embarks on £1.5bn share buyback programme
Distilling giant Diageo announced on Friday that it has entered into a non-discretionary agreement with Morgan Stanley to enable the company to buy back shares.
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The FTSE 100 firm said the current agreement would commence on 8 September, and was expected to end no later than 31 March 2018 for an aggregate maximum consideration of up to £1.5bn.
It said Morgan Stanley would make its trading decisions in relation to the company's securities independently of, and uninfluenced by, the company.
Any purchase of shares by Diageo contemplated by the announcement would be carried out on the London Stock Exchange, the board added.
“The purpose of the buy-back programme is to reduce the share capital of Diageo,” the company’s board said in its statement.
“All shares purchased will be cancelled.”
The share buy-back programme of up to £1.5bn would fall within the maximum number of shares that may be repurchased pursuant to Diageo's existing general authority from shareholders.
That authority gave the board permission to repurchase up to a maximum of 251,781,000 shares, and was granted at its 2016 annual general meeting.
“A renewed general authority to repurchase up to a maximum of 251,773,000 shares is being sought at Diageo's forthcoming annual general meeting on 20 September,” the board added.