UPDATE 1-Domtar to buyback up to $150 mln in shares

Wed May 5, 2010 9:34am EDT

* To buyback up to $150 mln in shares from time to time

* Initiates regular quarterly dividend

* Shares off 4 pct on NYSE

May 5 (Reuters) - Domtar Corp (UFS.TO) (UFS.N) said its board authorized a share buyback program of up to $150 million in common stock, and the forestry firm initiated a regular quarterly dividend.

The first quarterly dividend of 25 cents per share will be paid on July 15 to shareholders of record on June 15, the company said.

Domtar said under the buyback program, the dual listed company is authorized to repurchase, from time to time, shares of its outstanding common stock on the open market or in privately negotiated transactions in the United States.

Last week, Domtar posted a first-quarter profit that beat market estimates, aided by price increases and higher pulp, paper and wood shipments. [ID:nSGE63J0HV]

Shares of the company fell 4 percent to $67.62 Wednesday morning on the New York Stock Exchange. (Reporting by Isheeta Sanghi in Bangalore; Editing by Ratul Ray Chaudhuri)