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Starwood approves $1.1 billion sales repurchase

Starwood Hotels & Resorts Worldwide announced on Friday that its board of directors has approved a new US$1.1 billion share repurchase authorization.

Including approximately US$400 million remaining under the prior authorization, Starwood’s total share repurchase authorization is now approximately US$1.5 billion. Starwood Hotels & Resorts Worldwide, Stamford, Connecticut, has repurchased approximately US$200 million of shares to date in 2014 and expects to accelerate the pace of its repurchases.

“Starwood has a strong balance sheet and we are executing well on our asset-light strategy. Accordingly, our board has determined that we can substantially increase the pace of share repurchases and move quickly to reach and sustain our target leverage ratio of 2.5-3.0x,” said Frits van Paasschen, Starwood’s president and CEO.

Starwood’s board on Friday declared a regular quarterly dividend of {7}.35 per share, payable on September 26 to stockholders of record on September 5. The Board also today declared a special dividend of {7}.65 per share, payable on September 26 to stockholders of record on September 5.

“We believe it is plausible that the remaining US$1.5 billion authorization could be exhausted over the next six quarters as long as the board’s two criteria are met — that leverage remains within the now-higher targeted range and the board believes the stock’s valuation is discounted,” David Loeb, an analyst with R.W. Baird & Co. wrote in a note to investors. “We believe substantial asset sales could be completed over the next year, supporting the potential for significant amounts of capital to be returned to shareholders.”

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