Lorillard Expands Share Buyback Scheme

Lorillard (NYSE: LO  ) is reaching into its pack of tricks to help boost the value of its shares. The company's board has authorized a $500 million expansion of its common stock buyback program, pushing the full authorization to $1.0 billion. The company announced the original $500 million program in early March.

The buybacks will be effected through various means, including but not limited to open market purchases, block trades, and privately negotiated purchases.

In the press release announcing the move, Lorillard pointed out that the authorization doesn't obligate it to purchase any specific amount of stock. Additionally, the scheme "may be suspended, modified, or discontinued at any time and has no set expiration date."

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  • Report this Comment On May 21, 2013, at 6:10 PM, Njja wrote:

    And why exactly is this a scheme? First of all they buy the stock with cheap borrowed money. Secondly they get the benefit of not having to pay a dividend on the purchased stock. Finally they can always sell additional shares at a later date or use them to acquire another company. I fail to see anything negative about a company already paying a nice dividend purchasing their own stock if they think it is at an attractive price.

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