ISLANDIA, N.Y. (AFX) - Business software maker CA Inc. said Tuesday it will kick off the first phase of a $2 billion stock buyback program Aug. 16, launching a tender offer for up to 40.8 million shares worth about $1 billion.
CA, formerly known as Computer Associates, said it will repurchase the outstanding shares at a price between $22.50 and $24.50 per share.
The company will pay for the transactions from bank borrowings and available cash. In a conference call Monday, CA's interim chief financial officer said the company expects that one-half to three-quarters of the buyback will be funded with borrowings.
CA said its ability to borrow under its existing credit facility could be restricted unless it obtains a waiver from lending banks, and that it cannot guarantee it will receive financing with satisfactory terms.
The company, which is still recovering from a massive accounting scandal, did not offer details as to the second half of the buyback program. The first phase is set to expire at the close of business Sept. 14.
Banc of America Securities, Citigroup Global Markets and J.P. Morgan Securities are underwriting the tender offer.
Shares closed earlier up $1.47, or 7 percent, at $23.24, and rose 35 cents to $23.59 in aftermarket trading on the INET electronic exchange.
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