QIAGEN announces details for completion of synthetic share repurchase of up to approximately $300 million

Rhea-AI Summary

QIAGEN N.V. announced a synthetic share repurchase plan to return up to approximately $300 million to shareholders through a direct capital repayment and a reverse stock split. The plan is expected to reduce the number of issued shares by approximately 3% and lead to a reduction of approximately 6.9 million shares. Shareholders will receive a capital repayment of $1.28 per pre-split share. The last day of trading of the pre-split shares is planned to be Monday, January 29, 2024, with the consolidated shares expected to begin trading on Tuesday, January 30, 2024. Technical details regarding settlement mechanics for shareholders holding their QIAGEN shares in brokerage accounts in the United States and in Germany and elsewhere in Europe are also provided.

Insights

Financial Analyst

The synthetic share repurchase plan announced by QIAGEN represents a significant capital allocation decision that will have a direct impact on shareholder value. The use of existing cash reserves to fund this repurchase indicates a strong cash position and a focus on enhancing shareholder returns. The expected 3% reduction in the number of issued shares should theoretically increase the earnings per share (EPS), assuming constant net income, which could make the stock more attractive to investors. However, the market's reaction will depend on perceptions of future growth prospects and the opportunity cost of not investing the cash in business expansion or R&D.

While the consolidation of shares may lead to a temporary increase in share price due to the reduced supply of shares, investors should also consider the liquidity implications. A reduced share count could potentially decrease stock liquidity, which might affect the stock's volatility. Moreover, the execution of such a plan must be monitored closely as it involves complex settlement mechanics and any discrepancies during the process could impact investor confidence.

Market Research Analyst

QIAGEN's decision to implement a synthetic share repurchase plan is indicative of a broader trend in the life sciences and diagnostics industry, where companies often return value to shareholders through buybacks and dividends. This is particularly common in mature companies with stable cash flows. The plan's technical details, such as the consolidation ratio and capital repayment amount, are crucial for investors to understand the immediate financial implications. The reduction of approximately 6.9 million shares is a substantial change to the company's capital structure and it may be seen as a positive signal about the company's future financial health.

Investors should also be aware of the new security identifiers, which will be required for tracking the stock post-split. The change in identifiers can sometimes lead to temporary confusion in the market. It's important to note that the company's strategic move is aligned with industry practices, where share repurchases are often used to signal confidence in the company's intrinsic value by management.

Legal Expert

The synthetic share repurchase plan involves a series of legal and regulatory steps that must be carefully navigated. The process of consolidating shares and repaying capital is subject to strict securities regulations, particularly in the U.S. and Europe where QIAGEN's shares are traded. The company's adherence to the regulations set by the Depository Trust Company in the U.S. and Clearstream Banking AG in Europe is essential for the smooth execution of the plan.

Shareholders are rightly advised to consult with their banks or brokers to understand the implications of the reverse stock split and capital repayment on their investments. This is especially important for the reconciliation of unsettled market trades and the handling of fractional shares, which could have tax implications. Additionally, the legal framework surrounding the notarial deeds, which are denominated in euros and the actual payment in U.S. dollars, requires careful consideration to avoid any legal or financial discrepancies.

Venlo, the Netherlands, Jan. 18, 2024 (GLOBE NEWSWIRE) -- QIAGEN N.V. (NYSE: QGEN; Frankfurt Prime Standard: QIA) today announced details for completion of the synthetic share repurchase plan to return up to approximately $300 million that combines a direct capital repayment to QIAGEN shareholders with a reverse stock split.

The repayment from existing cash reserves is expected to lead to an approximately 3% reduction in the number of issued shares (based on current share price).

The terms of the synthetic share repurchase are as follows: 

• Every 25 issued QIAGEN shares will be consolidated into 24.25 QIAGEN shares, leading to a reduction of approximately 6.9 million shares from the level of 230.8 million shares at the end of 2023.

• Following the implementation of the consolidation, QIAGEN will repay capital to shareholders of record in the amount of $1.28 per pre-split share. (As the par-value of QIAGEN shares is denominated in euros, the amount of the capital decrease and repayment in the respective notarial deeds will also be denominated in euros. The payment, however, will be made in U.S. dollars.) 

The last day of trading of the pre-split shares on the New York Stock Exchange and the Frankfurt Stock Exchange is planned to be Monday, January 29, 2024. Beginning on Tuesday, January 30, 2024, the consolidated QIAGEN shares, excluding the entitlement to the capital repayment, are expected to begin trading on the Frankfurt Stock Exchange (QIA) and on the NYSE (QGEN) under the Company’s current ticker symbols. In addition, the post-split shares will carry the following new security identifiers:

            ISIN:                NL0015001WM6

            CUSIP:            N72482 149

            WKN:              A40 0D5

Technical details regarding settlement mechanics

Shareholders holding their QIAGEN shares in brokerage accounts in the United States will have their holdings automatically consolidated in line with the consolidation ratio described above, whereby any fractional shares are planned to be sold and proceeds deposited in their account, effective as of close of business at 4:00 p.m. EST on Monday, January 29, 2024 (the “Effective Date” and the last trading day of the prior ISIN / CUSIP / WKN).

The capital repayment is planned to be made via Depository Trust Company to the respective brokerage accounts of the shareholders in the subsequent days. Unsettled market trades as of the Effective Date are planned to be reconciled by Depository Trust Company and settled in line with market practice (with the “Repayment Record Date” being January 31, 2024).

For shareholders who hold their QIAGEN shares in Germany and elsewhere in Europe directly or indirectly via Clearstream Banking AG, these holdings are expected to be consolidated through their banks, broker and custodians as of close of business European time on Monday, January 29, 2024. The capital repayment for these shareholders is expected to also be made in the subsequent days. Any fractional shares will be sold and deposited in their account.

Shareholders holding their QIAGEN shares in registered form directly at Equiniti (formerly American Stock Transfer and Trust Company ("AST")) are planned to have their holdings automatically consolidated in line with the consolidation ratio described above by processing in the register held by Equiniti, effective as of the Effective Date, and receive the capital repayment in their bank account known to the Company.

Shareholders are advised to consult with their bank or broker with any questions on the reverse stock split and the capital repayment.

Shareholders with questions about their tax status are advised to consult with their local tax advisor.

About QIAGEN

QIAGEN N.V., a Netherlands-based holding company, is the leading global provider of Sample to Insight solutions that enable customers to gain valuable molecular insights from samples containing the building blocks of life. Our sample technologies isolate and process DNA, RNA and proteins from blood, tissue and other materials. Assay technologies make these biomolecules visible and ready for analysis. Bioinformatics software and knowledge bases interpret data to report relevant, actionable insights. Automation solutions tie these together in seamless and cost-effective workflows. QIAGEN provides solutions to more than 500,000 customers around the world in Molecular Diagnostics (human healthcare) and Life Sciences (academia, pharma R&D and industrial applications, primarily forensics). As of September 30, 2023, QIAGEN employed more than 6,000 people in over 35 locations worldwide. Further information can be found at http://www.qiagen.com.

Forward-Looking Statement

Certain statements contained in this press release may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. To the extent that any of the statements contained herein relating to QIAGEN's products, including those products used in the response to the COVID-19 pandemic, timing for launch and development, marketing and/or regulatory approvals, financial and operational outlook, growth and expansion, collaborations, markets, strategy or operating results, including without limitation its expected adjusted net sales and adjusted diluted earnings results, are forward-looking, such statements are based on current expectations and assumptions that involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to, risks associated with management of growth and international operations (including the effects of currency fluctuations, regulatory processes and dependence on logistics), variability of operating results and allocations between customer classes, the commercial development of markets for our products to customers in academia, pharma, applied testing and molecular diagnostics; changing relationships with customers, suppliers and strategic partners; competition; rapid or unexpected changes in technologies; fluctuations in demand for QIAGEN's products (including fluctuations due to general economic conditions, the level and timing of customers' funding, budgets and other factors); our ability to obtain regulatory approval of our products; difficulties in successfully adapting QIAGEN's products to integrated solutions and producing such products; the ability of QIAGEN to identify and develop new products and to differentiate and protect our products from competitors' products; market acceptance of QIAGEN's new products and the integration of acquired technologies and businesses; actions of governments, global or regional economic developments, weather or transportation delays, natural disasters, political or public health crises, including the breadth and duration of the COVID-19 pandemic and its impact on the demand for our products and other aspects of our business, or other force majeure events; as well as the possibility that expected benefits related to recent or pending acquisitions may not materialize as expected; and the other factors discussed under the heading “Risk Factors” contained in Item 3 of our most recent Annual Report on Form 20-F. For further information, please refer to the discussions in reports that QIAGEN has filed with, or furnished to, the U.S. Securities and Exchange Commission.

Source: QIAGEN N.V.
Category: Financial

FAQ

What is the purpose of QIAGEN N.V.'s synthetic share repurchase plan?

The purpose is to return up to approximately $300 million to shareholders through a direct capital repayment and a reverse stock split.

How much is the expected reduction in the number of issued shares as a result of the synthetic share repurchase plan?

The plan is expected to lead to an approximately 3% reduction in the number of issued shares and a reduction of approximately 6.9 million shares.

What is the amount of the capital repayment per pre-split share?

Shareholders will receive a capital repayment of $1.28 per pre-split share.

When is the last day of trading of the pre-split shares?

The last day of trading of the pre-split shares is planned to be Monday, January 29, 2024.

When are the consolidated shares expected to begin trading?

The consolidated shares are expected to begin trading on Tuesday, January 30, 2024.

What are the technical details regarding settlement mechanics for shareholders holding QIAGEN shares in brokerage accounts in the United States?

Shareholders holding their QIAGEN shares in brokerage accounts in the United States will have their holdings automatically consolidated in line with the consolidation ratio described in the PR.