Loblaw Companies Limited (Loblaw) announced today that the Toronto Stock Exchange (TSX) has approved its notice of intention to initiate a normal course issuer bid (NCIB).
Under the NCIB, which spans from May 6, 2024, to May 5, 2025, Loblaw may purchase up to 15,336,875 of its common shares (Common Shares), representing approximately 5% of its outstanding Common Shares. These purchases can be made on the TSX, through alternative trading systems, or by other methods permitted by the TSX or applicable law. As of April 22, 2024, Loblaw had 306,737,513 Common Shares outstanding. Given an average daily trading volume of 356,715 shares over the past six months, daily purchases will be capped at 89,178 shares, except for block purchase exceptions and transactions with George Weston Limited (GWL), Loblaw’s majority shareholder.
Loblaw is authorized to buy Common Shares from GWL in line with an exemption granted by the TSX, ensuring GWL maintains its proportional ownership. This exemption, consistent with approvals since 2020, reduces the total shares Loblaw can buy through the NCIB by the number purchased from GWL.
Shares will be acquired through open market transactions on the TSX or via alternative trading systems. Loblaw may also engage in forward purchase or swap contracts for Common Shares, which may be settled physically, in cash, or a combination of both. These forward prices will depend on market price, dividend yield, and market interest rates. Additionally, Loblaw may purchase shares via private agreements or share repurchase programs, pending an issuer bid exemption order, potentially at a discount to market price.
Purchases from GWL will occur during the TSX’s Special Trading Session under an automatic disposition plan agreement (ADP Agreement) between Loblaw’s broker, Loblaw, and GWL. These purchases will coincide with other shareholder purchases. If GWL fails to sell shares on a required trading day (except due to a market disruption), the TSX exemption ceases, halting further GWL purchases under the NCIB.
Future share purchases will depend on market conditions, share price, and other factors. Loblaw can suspend or discontinue the NCIB at any time. Shares bought through the NCIB will be canceled or used to settle restricted or performance share units. Loblaw believes buying its shares may be a prudent use of funds, potentially offsetting dilution from exercised options. Under the prior NCIB (May 5, 2023 – May 4, 2024), Loblaw received TSX approval to buy up to 16,055,686 shares, purchasing this amount by April 30, 2024, at a weighted average price of $127.78 per share.
When not in possession of material non-public information, Loblaw may pre-arrange with its broker to purchase shares during internal blackout periods and under insider trading rules, adhering to Canadian securities laws.
