Accelerated share repurchase example
Utility Consolidated Edison (ED -0.70%) sold its clean energy business for $6.8 billion in cash in early 2023. Shortly after closing that deal, the company launched a $1 billion ASR with two dealers. Under the terms of the agreement, the company made $1 billion in payments to those dealers and received 8.7 million of its shares that same day.
The dealers will base the final number of shares repurchased on the volume-weighed average price (VWAP) of the stock during the term, minus a discount. Consolidated Edison anticipates the final settlement will occur by the third quarter of 2023. The ASR enabled Consolidated Edison to quickly return some of the cash proceeds from its clean energy business divestiture to investors by repurchasing shares.