Allstate to buy back $1 billion of shares
(Reuters) - Allstate Corp (ALL.N) said its board approved a new share buyback program of up to $1 billion, to be funded by issuing subordinated debentures.
The repurchase is expected to be completed by December 31, 2013 and may include an accelerated repurchase program, the home and auto insurer said in a statement.
"I was surprised to see that, because Allstate's performance even including significant hurricane Sandy losses, have been solid," Stifel analyst Meyer Shields said about the buyback offer.
"On the other hand, this does preserve some financial flexibility and I would have to ascribe the funding mechanism to that .. the desire to maintain more flexibility," Shields added.
The buybacks will begin immediately and the hybrid securities will be sold over the year.
The company recently concluded a $1 billion repurchase announced in November 2011, funded using preferred stock and senior unsecured notes. (link.reuters.com/juc74t) It has said it expected October losses of $1.08 billion, largely related to superstorm Sandy.
Allstate shares were marginally up in trading after the bell. They had closed at $40.79 on the New York Stock Exchange.
(Reporting by Aman Shah in Bangalore; Editing by Sreejiraj Eluvangal)