Dominion Resources to Buy Back 16% of Its Outstanding Stock
Integrated gas and electric company Dominion Resourceson Thursday it will seek to buy back about 55 million common shares, or nearly 16 percent of its outstanding stock, using part of the proceeds from its asset sales.
Shares rose more than 4%.
Dominion expects to start a modified Dutch auction self-tender by mid-July. Shareholders could tender some or all of their shares at prices from $82 to $92 per share, said the Richmond, Virginia-based company. The company then will pick a price and buy shares tendered at that level or below.
The share buyback program is part of the power company's plan to use the proceeds from the sales of most of its oil and natural gas exploration and production (E&P) assets.
"As we have stated previously, we intend to use proceeds raised by the E&P divestitures to reduce debt in a range of $3.2 billion to $3.5 billion. Every dollar not used for debt retirement can be committed to the repurchase of common stock," said Chief Executive Thomas Farrell in a statement.
The company said it expects to buy back more shares in the future. The debt repayment and share repurchases would be independent of the timing of the divestiture of its natural gas local distribution companies, said Farrell.
So far, Dominion has agreed to sell $11.84 billion of its E&P assets. It is still shopping its mid-continent gas assets, which analysts said could fetch between $1.7 billion and $2 billion.