Nutrien Announces TSX Approval for Its Renewed Share Repurchase Program

Rhea-AI Summary

Nutrien Ltd. (NTR) announces a normal course issuer bid (NCIB) to repurchase up to five percent of its outstanding common shares. The company believes this move is a sound investment opportunity and aligns with its goal of returning capital to shareholders. Nutrien had 494,563,180 common shares outstanding as of February 16, 2024, allowing it to repurchase up to 24,728,159 shares under the NCIB. Purchases will be made through various trading platforms and will be subject to regulatory restrictions. The NCIB will commence on March 1, 2024, and expire on February 28, 2025, or when the maximum number of shares is repurchased.

Financial Analyst

From a financial perspective, Nutrien's initiation of a normal course issuer bid (NCIB) to repurchase up to five percent of its outstanding common shares is a significant move that can have various implications for shareholders and the company's capital structure. The repurchase of shares is often seen as a signal that a company believes its stock is undervalued and that it has sufficient cash reserves to allocate to buying back shares rather than investing in new projects or paying down debt. This can be interpreted as a positive sign by the market, potentially leading to an uptick in the stock price.

However, there are also risks associated with share buybacks. They can reduce the company's cash reserves, which might limit future growth opportunities or the ability to weather economic downturns. Additionally, if the buyback is financed through debt, it could increase the company's leverage, making it more vulnerable to financial stress. It's important for investors to consider the company's rationale for the buyback and its overall financial health when evaluating the potential impact on the stock's value.

Market Research Analyst

Share buyback programs like the NCIB announced by Nutrien are often a response to market conditions and can reflect broader trends in the sector. In the agricultural sector, where Nutrien operates, such moves can be influenced by commodity prices, global demand for fertilizers and industry-specific challenges. Investors should consider how these factors may affect Nutrien's performance and the potential for the NCIB to support the stock price.

Furthermore, the timing and execution of the buyback strategy are critical. The cancellation of repurchased shares can lead to a reduced share count, which in turn can improve earnings per share (EPS) metrics, even if net income remains constant. This financial engineering can make the company appear more profitable on a per-share basis and can be a tool to meet or exceed market expectations in the short term.

Legal Expert

Legal considerations are paramount in the execution of an NCIB. Nutrien's compliance with the TSX normal course issuer bid rules and the U.S. Securities Exchange Act of 1934, particularly Rule 10b-18, is essential to ensure the legitimacy of the buyback process. These regulations are designed to prevent market manipulation and protect investors by imposing restrictions on the volume of shares that can be repurchased daily.

Additionally, the use of an automatic purchase plan during self-imposed blackout periods is a strategy to avoid insider trading allegations, as it standardizes the buyback process and removes discretion during sensitive times when insiders might have access to non-public, material information.

SASKATOON, Saskatchewan--(BUSINESS WIRE)-- Nutrien Ltd. (TSX and NYSE: NTR) announced today that the Toronto Stock Exchange (TSX) has accepted Nutrien's notice to commence a normal course issuer bid (NCIB) to purchase outstanding common shares representing up to five percent of its issued and outstanding common shares.

Under the NCIB, purchases of common shares may be made through the facilities of the TSX, the New York Stock Exchange and/or alternative trading systems in Canada and the U.S., or as otherwise permitted under applicable securities laws. The actual number of common shares that may be purchased under the NCIB and the timing of any such purchases will be determined by Nutrien. Nutrien believes that purchasing its own common shares represents an attractive investment opportunity, is in the best interests of the company and is consistent with Nutrien's objective of returning capital to shareholders over time. As of February 16, 2024, Nutrien had 494,563,180 common shares outstanding and, therefore, is permitted to repurchase up to 24,728,159 of its outstanding common shares pursuant to the NCIB. Common shares purchased under the NCIB will be cancelled.

The NCIB will be effected in accordance with the TSX normal course issuer bid rules and/or Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended, which contain restrictions on the number of common shares that may be purchased on a single day, subject to certain exceptions for block purchases, based on the average daily trading volumes of Nutrien's common shares on the applicable exchange. Subject to exceptions for block purchases, Nutrien will limit daily purchases of common shares on the TSX in connection with the NCIB to no more than twenty-five percent (290,908 common shares) of the average daily trading volume of the common shares on the TSX (1,163,632 common shares) during any trading day. Purchases under the NCIB will be made through open market purchases at market price, as well as by other means as may be permitted under applicable securities laws, including private agreements. Any purchases made by private agreement under an issuer bid exemption order issued by a securities regulatory authority will be at a discount to the prevailing market price as provided in such exemption order. Purchases of common shares may commence on March 1, 2024 and will expire on the earlier of February 28, 2025, the date on which the company has acquired the maximum number of common shares allowable under the NCIB or otherwise decides not to make any further repurchases under the NCIB. Nutrien has entered into an automatic purchase plan with a broker which will enable Nutrien to provide standard instructions and purchase common shares on the open market during self-imposed blackout periods. Outside of these black-out periods, common shares may be purchased in accordance with management's discretion.

Nutrien's prior NCIB for the purchase of up to 24,962,194 common shares will expire on February 29, 2024. As of February 16, 2024, Nutrien repurchased an aggregate of 5,375,397 common shares at a weighted-average price of US$69.76 per share, for an aggregate of US$374,998,896 under the prior NCIB. Purchases were made on the open market.

About Nutrien

Nutrien is a leading provider of crop inputs and services, helping to safely and sustainably feed a growing world. We operate a world-class network of production, distribution and ag retail facilities that positions us to efficiently serve the needs of growers. We focus on creating long-term value by prioritizing investments that strengthen the advantages of our integrated business and by maintaining access to the resources and the relationships with stakeholders needed to achieve our goals.

Forward-Looking Statements

Certain statements and other information included in this press release constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements") under applicable securities laws (such statements are usually accompanied by words such as "anticipate", "expect", "believe", "may", "will", "should", "project", "estimate", "intend" or other similar words). All statements in this press release, other than those relating to historical information or current conditions, are forward-looking statements, including, but not limited to the timing, methods and quantity of any purchases by Nutrien of its common shares under the NCIB.

Forward-looking statements in this press release are based on certain key expectations and assumptions made by Nutrien, including expectations and assumptions concerning: Nutrien's views with respect to its financial condition and prospects, the stability of general economic and market conditions, currency exchange rates and interest rates, the availability of cash for repurchases of common shares under the NCIB, the existence of alternative uses for Nutrien's cash resources and compliance with applicable laws and regulations pertaining to the NCIB. Although Nutrien believes that the expectations and assumptions on which such forward looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Nutrien can give no assurance that they will prove to be correct.

Forward-looking statements are subject to various risks and uncertainties which could cause actual results and experience to differ materially from the anticipated results or expectations expressed in this press release. The key risks and uncertainties include, but are not limited to: Nutrien's future capital requirements; general economic and market conditions; the overall global economy and the impacts, direct and indirect, of the war between Ukraine and Russia and the conflict in the Middle East on, among other things, global supply and demand, energy and commodity prices, the impact of changes to interest rates, disruptions to supply chains and developments in the global economy generally; demand for Nutrien's products; and unforeseen legal or regulatory developments and other risk factors detailed from time to time in Nutrien's reports filed with the Canadian securities regulatory authorities and the United States Securities and Exchange Commission.

The forward-looking statements in this document are made as of the date hereof and Nutrien disclaims any intention or obligation to update or revise any forward-looking statements in this press release as a result of new information or future events, except as may be required under applicable laws.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240226608745/en/

FOR FURTHER INFORMATION:



Investor Relations

Jeff Holzman

Vice President, Investor Relations

(306) 933-8545



Media Relations

Megan Fielding

Vice President, Brand & Culture Communications

(403) 797-3015



Contact us at: www.nutrien.com

Source: Nutrien Ltd.

FAQ

What is Nutrien Ltd.'s (NTR) announcement regarding a normal course issuer bid (NCIB)?

Nutrien Ltd. (NTR) has announced a NCIB to repurchase up to five percent of its outstanding common shares.

How many common shares does Nutrien have outstanding as of February 16, 2024?

As of February 16, 2024, Nutrien had 494,563,180 common shares outstanding.

How many shares can Nutrien repurchase under the NCIB?

Nutrien can repurchase up to 24,728,159 of its outstanding common shares under the NCIB.

When will the purchases under the NCIB commence?

Purchases under the NCIB will commence on March 1, 2024.

When will the NCIB expire?

The NCIB will expire on the earlier of February 28, 2025, the date on which the company has acquired the maximum number of common shares allowable under the NCIB, or if the company decides not to make any further repurchases.