The buyback binge continues, especially among blue chips.

Merrill Lynch announced that it plans to repurchase up to $6 billion of its shares, or about 8 percent of the total outstanding.

Reuters pointed out that in February 2006, Merrill announced a $6 billion buyback authorization, followed by a $5 billion authorization last October, of which some $1.2 billion remains available. Since the beginning of 2006, Merrill has repurchased more than $2 billion of its shares each quarter, about twice the volume of its previous buybacks.

The latest authorization “will enable us to continue to be active and flexible in managing our equity capital,” noted chief financial officer Jeffrey Edwards, in a statement. “We seek to balance increasing our return on equity and growing our book value per share. To achieve this goal, our primary focus is to deploy capital into profitable growth opportunities. But to the extent we generate excess capital, we will continue to use share repurchases, as well as cash dividends, to return capital to stockholders.” (Read our interview with Edwards in the May issue of CFO magazine.)

Meanwhile, last week IBM announced that its board authorized an additional $15 billion for its stock repurchase program, accounting for about 10 percent of the company’s market capitalization. Big Blue also has about $1.4 billion remaining from a prior authorization.

Also last week, Valero Energy announced that its board expanded the company’s stock repurchase authorization by $4 billion, to a total of $6 billion.

The company also announced that it has entered into a private accelerated share-repurchase agreement with an affiliate of JPMorgan, under which Valero will purchase its common stock for an upfront payment of $3 billion. The payment will be funded with a short-term bridge loan, expected to be taken out with longer-term financing at a later date.

The price of the repurchased shares will be based on a discount to the volume-weighted average trading price during a period of up to four months. The shares initially repurchased will be held as treasury shares when delivered by JPMorgan to the company, on or about April 30.

Valero expects to use its remaining authorization to purchase shares in the open market over the remainder of this year.

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