Home Depot to repurchase 289.6M shares

The Home Depot Inc. said Tuesday it expects to repurchase 289.6 million of its shares for $10.7 billion as a result of a tender offer, a little less than halfway towards its goal of buying back $22.5 billion in stock.

Preliminary results of the tender offer that ended Friday indicated the nation's biggest home improvement store chain expected to repurchase the shares at $37 per share, using about $8 billion in net proceeds from its sale of HD Supply and $2.7 billion in cash, said spokeswoman Paula Drake.

Drake said the final results will be released next week.

Because Atlanta-based Home Depot decided to use cash in the tender offer, the company did not utilize a $2 billion credit line it set up in connection with the tender offer, Drake said.

The 289.6 million shares represents about 48 percent of the company's plan to repurchase $22.5 billion in shares. Drake said the company will continue buying back shares but said Tuesday there was no specific timeline for doing so.

The company originally offered to purchase up to 250 million shares of its stock but elected to purchase an additional 39.6 million shares under the terms of its tender offer.

Home Depot announced Aug. 30 it had sold HD Supply _ its wholesale distribution business _ for $8.5 billion sale to a group of private equity firms. The sale price was reduced from the $10.3 billion that the buyers had initially agreed to pay for HD Supply in June.

The completed agreement calls for Atlanta-based Home Depot to retain a 12.5 percent stake in HD Supply and to guarantee $1 billion of debt the buyers took on to complete the transaction.

Home Depot said earlier that it would pay $325 million for the equity stake.

Shares of Home Depot fell $1.95, or 5.1 percent, to $36.36 Tuesday. Shares have traded between $31.85 and $42.01 during the past year.

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On the Net:

The Home Depot Inc.: http://www.homedepot.com