Quest Diagnostics Incorporated (NYSE: DGX) today announced that it had agreed to repurchase at a negotiated price 15.4 million shares of its common stock from its largest shareholder, an affiliate of GlaxoSmithKline plc (GSK). Subsequent to the transaction, GSK will no longer hold any shares of common stock of Quest Diagnostics.
"Through this transaction, we are taking advantage of a unique opportunity to enhance shareholder value and demonstrating confidence in the long term outlook for our business," said Surya N. Mohapatra, Chairman and CEO of Quest Diagnostics. "We continue to maintain the financial flexibility to pursue acquisitions, which remains a key element of our growth strategy."
Quest Diagnostics will repurchase the shares using a combination of cash on hand and borrowing through available credit facilities. The repurchase will be applied against the company's current $1 billion share repurchase authorization.
As a result of this transaction, the company is raising its 2011 guidance for diluted earnings per share before special items to be between $4.25 to $4.45. Previous guidance was $4.10 to $4.30.
Quest Diagnostics Incorporated