Federated Investors will issue a special cash dividend of $2.76 per share to shareholders and also announced today a new share repurchase program that will allow the money manager to buy back up to 5 million additional shares of its class B common stock, said spokeswoman Meghan McAndrew.
The company also entered into a $140 million term loan agreement that, together with an existing $200 million revolving credit facility and roughly $135 million in available cash, will provide sufficient liquidity to finance the $276 million in special dividend payouts and the additional share buybacks.
In a news release, CFO Thomas R. Donahue said the moves give the firm a more efficient capital structure and leave Federated poised to continue to pursue growth opportunities, including acquisitions. In late afternoon trading, Federateds shares were up more than 4%, while the S&P 500 index was down more than 1.0%.
Federated managed $333.5 billion in assets as of June 30.