Michaels Cos. Inc. has entered into an accelerated share repurchase agreement with JPMorgan Chase Bank N.A., London Branch, to buy back $250 million of its common stock.
According to a July 2 filing with the SEC, the agreement is part of a $500 million share repurchase program that Michaels announced on June 15, 2017.
The arts-and-crafts store operator will pay JPMorgan Chase $250 million in exchange for an initial delivery of approximately 10.5 million shares of its stock, which represents around 80% of the shares Michaels expects to repurchase under the agreement.
The transaction is expected to be settled in the third quarter of 2018, unless JPMorgan decides to accelerate the settlement. Once the deal is settled, the bank will deliver the remaining shares to Michaels. However, under certain circumstances, the retail chain may instead deliver its own shares to JPMorgan or make a cash payment to the London-based bank.
Michaels added that the total number of shares it will repurchase under the agreement will be based on the volume-weighted average share price of its stock during the term of the transaction.