Today, Florida East Coast Industries Inc. (FECI) announced it reached an agreement to purchase 5.5 million shares of common stock from stockholders The Alfred I. duPont Testamentary Trust and The Nemours Foundation for $34.50 per share or about $190 million.
Representing about 15 percent of the company's total outstanding common stock, the shares will be held as treasury stock. After completing the transaction on or about Aug. 13, the trust still will own 9.8 percent of outstanding stock, but the foundation will no longer own any shares. The trust and foundation are reducing or eliminating their ownership stake in FECI to diversify their stock portfolios.
As part of the agreement, trust representatives Winfred Thornton, John Lord and Herbert Peyton will resign from FECI's board no later than Aug. 20, and the trust will not sell additional FECI shares until Jan. 1.
FECI will finance the transaction with cash and proceeds from a recent mortgage financing deal.
"The direct purchase of shares will eliminate the overhang associated with the large block of shares owned by the trust and will not reduce the publicly traded float in the company stock," said FECI Chairman, President and Chief Executive Officer Robert Anestis in a prepared statement.