Quest Diagnostics (DGX), a holding of Market Shadows' Virtual Value Portfolio, is accelerating its share repurchase agreement. DGX has been trading higher higher today. We also sold a put on DGX in the Virtual Put Selling Portfolio on 1/30/13.
On April 19, 2013, Quest Diagnostics Incorporated (the "Company") entered into an accelerated share repurchase agreement (the "ASR Agreement") with Goldman, Sachs & Co. as the counterparty ("Bank"), to repurchase approximately $450 million of the Company's common stock ("Common Stock"), as part of the Company's Common Stock repurchase program.
Under the ASR Agreement, the Company made a $450 million payment to Bank on April 22, 2013 and received an initial number of 7,242,489 shares of Common Stock from Bank on the same day. The specific number of shares that the Company ultimately will repurchase under the ASR Agreement will be based generally on the average of the daily volume-weighted average price per share of the Common Stock during a repurchase period, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR Agreement. At settlement, under certain circumstances, Bank may be required to deliver additional shares of Common Stock to the Company, or under certain circumstances, the Company may be required to deliver shares of Common Stock or may elect to make a cash payment to Bank. The ASR Agreement contains provisions customary for agreements of this type, including provisions for adjustments to the transaction terms, the circumstances generally under which the ASR Agreement may be accelerated, extended or terminated early by Bank and various acknowledgments, representations and warranties made by the parties to one another. The transaction is expected to be completed during the third quarter of 2013.