The Hanover Insurance Group has entered into an accelerated share repurchase (ASR) to buy back $150 million of its common stock, in addition to declaring a $100 million special dividend.
The announcement completes the deployment of the $850 million of capital that the company generated through the sale of Chaucer, its Lloyd’s business, at the end of 2018.
Both the regular quarterly dividend of $0.65 per share and the special cash dividend of $2.50 per share on the issued and outstanding stock of the company will be payable on December 27, 2019.
The Hanover’s board of directors has also increased the company’s existing share repurchase authorization to $900 million.
After accounting for the $150 million ASR and shares previously repurchased during the year, the company will have approximately $335 million remaining under the authorization.
Pursuant to the $150 million ASR agreement with Wells Fargo Bank, N.A., the company expects to receive 80%, or approximately 900,000 shares, of the total shares by December 9, with the remaining share to be received by the end of the first quarter of 2020.
“We are pleased with the execution of the capital deployment and return of the remaining $250 million in capital to shareholders from the sale of Chaucer,” said Jeffrey M. Farber, executive vice president and chief financial officer at The Hanover.
“It is a testament to our diligent capital allocation and management framework, and it reinforces our commitment to deliver value for our shareholders,” he continued.
“In addition, the 8.3% increase in our regular quarterly dividend highlights our board’s confidence in our overall financial condition and our increasing earnings capacity. We will continue to allocate our capital with the best interest of our shareholders in mind.”
