Cognizant begins $300 million share repurchase; to buyback $1.2 billion shares in 2018

Bengaluru: Cognizant said it was beginning a $300 million accelerated share repurchase program as part of its plan to buyback $1.2 billion of shares in 2018.

The company entered into an agreement with Barclays Bank to repurchase the shares. Under the terms of the agreement, approximately 3.58 million of the shares to be repurchased will be received by Cognizant on December 14, 2017.

The final settlement of the transaction is anticipated to occur during the first quarter of 2018. Cognizant will fund the program on December 14, 2017 from cash on hand and its existing credit facility.

"We have returned approximately $1.8 billion under our previously announced capital return plan through the initiation of our dividend and the completion of a $1.5 billion ASR. We are pleased to launch the next phase of our capital return program," Francisco D'Souza, Chief Executive Officer, said in a statement. "This ASR demonstrates our continued confidence in the long term growth of our business."

Cognizant had committed to return $3.4 billion to shareholders through buybacks and dividends after activist hedge fund Elliott attacked it for poor returns. The company has since cut jobs and expects to grow its margin as it recalibrates its business for slower growth.