Sun Life Announces Intention to Renew Normal Course Issuer Bid

Rhea-AI Summary

Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF) has announced its intention to renew its normal course issuer bid (NCIB) to purchase up to 15,000,000 of its common shares, representing approximately 2.6% of the 578,405,077 common shares issued and outstanding as of June 30, 2024. The NCIB is subject to approval from the Office of the Superintendent of Financial Institutions and the Toronto Stock Exchange.

The NCIB is expected to commence on August 29, 2024, and will end 12 months after commencement. Purchases may be made through various Canadian stock exchanges and alternative trading platforms at prevailing market rates. The company may also make purchases through private agreements or share repurchase programs under issuer bid exemption orders, typically at a discount to market price.

This initiative provides Sun Life with flexibility to return capital to shareholders as part of its overall capital management strategy. The actual number and timing of share purchases will be determined by the company, and all purchased shares will be cancelled or used for equity-settled incentive arrangements.

Positive

• Potential to return capital to shareholders through share repurchases
• Flexibility in capital management strategy
• Ability to acquire shares at market rates or potentially at a discount

Negative

• Potential reduction in outstanding shares, which may affect earnings per share calculations

Insights

Financial Analyst

Sun Life's announcement to renew its Normal Course Issuer Bid (NCIB) is a strategic move that signals confidence in the company's financial position. The potential repurchase of up to 15 million common shares (approximately 2.6% of outstanding shares) demonstrates a commitment to returning capital to shareholders. This action can potentially boost earnings per share and support stock price by reducing the number of outstanding shares. However, investors should note that the actual impact depends on the execution and market conditions. The flexibility to purchase shares through various methods, including private agreements, allows Sun Life to optimize the buyback strategy. While generally positive for shareholders, it's important to monitor how this capital allocation decision balances with other growth initiatives and dividend policies.

Market Research Analyst

Sun Life's NCIB renewal reflects a broader trend in the financial services sector, where companies are increasingly using share buybacks as a capital management tool. This move could be interpreted as management's belief that the stock is undervalued, potentially signaling bullish sentiment. The timing of the announcement, amidst global economic uncertainties, suggests Sun Life's robust financial health and liquidity position. However, investors should consider the opportunity cost of buybacks versus alternative uses of capital, such as investments in growth initiatives or increasing dividends. The market's reaction to this news will likely depend on Sun Life's overall performance, industry trends and macroeconomic factors. It's worth noting that the actual implementation of the NCIB over the next 12 months will be a key factor to watch, as it may impact trading volumes and price dynamics.

TORONTO, Aug. 12, 2024 /PRNewswire/ - Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF) (the "Company" or "Sun Life") announced today that, subject to the approval of the Office of the Superintendent of Financial Institutions ("OSFI") and the Toronto Stock Exchange (the "TSX"), it intends to renew its normal course issuer bid to purchase up to 15,000,000 of its common shares (representing approximately 2.6% of the 578,405,077 common shares issued and outstanding as at June 30, 2024) (the "NCIB"). The Company will file a notice of intention with the TSX in this regard.

The NCIB will provide the Company with the flexibility to acquire common shares in order to return capital to shareholders as part of its overall capital management strategy.

The NCIB is expected to commence on August 29, 2024, or such earlier date determined by the Company following receipt of applicable approvals by OSFI and the TSX, and will end at the latest on the date that is 12 months after the commencement of the NCIB. Purchases under the NCIB may be made through the facilities of the TSX, other Canadian stock exchanges and/or alternative Canadian trading platforms, at prevailing market rates. Subject to regulatory approval, purchases under the NCIB may also be made by way of private agreements or share repurchase programs under issuer bid exemption orders issued by securities regulatory authorities. Any purchases made under an exemption order issued by a securities regulatory authority will generally be at a discount to the prevailing market price. The actual number of common shares purchased under the NCIB, and the timing of such purchases (if any), will be determined by the Company. Any common shares purchased by the Company pursuant to the NCIB will be cancelled or used in connection with certain equity settled incentive arrangements.

From time to time, when the Company does not possess material non-public information about itself or its securities, it may enter into a pre-defined plan with its broker to allow for the repurchase of common shares of the Company at times when the Company ordinarily would not be active in the market due to its own internal trading blackout periods, insider trading rules or otherwise. Any such plans entered into with the Company's broker will be adopted in accordance with applicable Canadian securities laws.

Forward-Looking Statements
From time to time, the Company makes written or oral forward-looking statements within the meaning of certain securities laws, including the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements contained in this news release include statements (i) relating to the Company's potential normal course issuer bid (including, but not limited to, statements relating to the entrance into a pre-defined plan with its broker), (ii) that are predictive in nature or that depend upon or refer to future events or conditions, and (iii) that include words such as "intends", "expects", "will" and similar expressions. The forward-looking statements made in this news release are stated as at August 12, 2024, represent the Company's current expectations, estimates and projections regarding future events and are not historical facts. These statements are not a guarantee of future performance and involve assumptions and risks and uncertainties that are difficult to predict. Some of these assumptions and risks and uncertainties are described further in the Company's management's discussion and analysis for the year ended December 31, 2023 under the heading "Forward-looking Statements", in the risk factors set out in the Company's annual information form for the year ended December 31, 2023 under the heading "Risk Factors", and in the Company's interim management's discussion and analysis for the quarter ended June 30, 2024 under the heading "Risk Management", in the other factors detailed in the Company's annual and interim financial statements and in the Company's other filings with Canadian and U.S. securities regulators, which are available for review at www.sedarplus.ca and www.sec.gov, respectively. Actual results may differ materially from those expressed, implied or forecasted in such forward-looking statements and there is no assurance that OSFI and/or the TSX will approve the NCIB or that any common shares will be purchased under the NCIB.

The Company does not undertake any obligation to update or revise its forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by law.

About Sun Life
Sun Life is a leading international financial services organization providing asset management, wealth, insurance and health solutions to individual and institutional Clients. Sun Life has operations in a number of markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. As of June 30, 2024, Sun Life had total assets under management of $1.46 trillion. For more information, please visit www.sunlife.com.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF.

Note to editors: All figures in Canadian dollars

Media Relations Contact:								Investor Relations Contact:
Kim Race								David Garg
Director								Senior Vice-President, Capital
Corporate Communications								Management and Investor Relations
T. 416-779-4574								T. 416-408-8649
kim.race@sunlife.com								david.garg@sunlife.com

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SOURCE Sun Life Financial Inc.

FAQ

How many shares does Sun Life (SLF) plan to repurchase in its new NCIB?

Sun Life (SLF) plans to repurchase up to 15,000,000 of its common shares, representing approximately 2.6% of the 578,405,077 common shares issued and outstanding as of June 30, 2024.

When is the expected start date for Sun Life's (SLF) new share repurchase program?

The new normal course issuer bid (NCIB) for Sun Life (SLF) is expected to commence on August 29, 2024, subject to regulatory approvals.

What is the purpose of Sun Life's (SLF) share repurchase program?

The purpose of Sun Life's (SLF) share repurchase program is to provide the company with flexibility to return capital to shareholders as part of its overall capital management strategy.

How long will Sun Life's (SLF) new share repurchase program last?

Sun Life's (SLF) new share repurchase program will last for 12 months from the commencement date, which is expected to be August 29, 2024.