Cigna Corporation (NYSE: CI) revealed that it has entered into an Accelerated Stock Repurchase (ASR) Agreement. As per the agreement, the firm will buy back $2.0 billion of common stock through ASR Agreements with each of Morgan Stanley & Co. LLC and JPMorgan Chase Bank, N.A.
It has been disclosed that the ASRs are part of Cigna's current share buyback program, which had the remaining authorization of $3.8 billion as of August 4, 2021. This declaration of ASR has demonstrated the confidence and trust of the Board of Directors of the firm in the financial and growth strategies of the firm.
As per the ASR Agreements, Cigna will obtain an aggregate initial delivery of nearly 7.7 million shares of Cigna common stock in exchange for a prepayment of $2.0 billion. The exact number of shares that Cigna eventually will buyback following the ASR Agreements will be based generally on the daily volume-weighted average share price of Cigna common stock over the term the ASR Agreements, less a discount and dependent on adjustments following the terms and conditions of the ASR Agreements.
Furthermore, Cigna may have the right to obtain additional shares of Cigna common stock from the Trading Partners or Cigna might be required to make a cash payment or, if Cigna elects, provide shares of Cigna common stock to the Counterparties. All of the shares of Cigna common stock distributed to Cigna under the ASR Agreements will be held in treasury or retired.