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Hanover board OKs buyback plan, declares special dividend

Hanover Insurance Group Inc.'s board has approved a $600 million share repurchase authorization and a $250 million accelerated share repurchase agreement.

The authorization replaces the previous one, which had a balance of about $90 million upon termination.

The company utilized the program to immediately execute an accelerated share buyback agreement for a total purchase price of $250 million with JPMorgan. The repurchase period for the agreement is expected to close during the second quarter of 2019.

The board also declared a special dividend of $4.75 per share or about $200 million in total, payable Jan. 25 to shareholders of record at the close of business Jan. 10.

Additionally, the company will retire a $125 million Federal Home Loan Bank note due 2029 with a coupon of 5.50% and a settlement date of Jan. 2. It expects to record a nonoperating charge of $20 million, or 47 cents per share, after taxes in the fourth quarter of 2018. Hanover said the note was collateralized and that the retirement's funding will not have an effect on the Chaucer PLC sale proceeds or deployable equity.