Why is Allscripts Boosting its Buyback?
Allscripts Heathcare Solutions (NASDAQ:MDRX) announced on Monday that its Board of Directors has doubled the size of a stock buyback program. The Board of Directors has authorized management to repurchase an additional $200 million of Allscripts common stock, which brings the total repurchase authorization to $400 million.
Allscripts has repurchased nearly $52 million of company common stock under its previously-approved $200 million share repurchase program since May 5, 2011. Repurchases may be made in accordance to stipulations of the Securities Exchange Act of 1934, stating that any share repurchases may be made through open market transactions, block trades, privately negotiated transactions, and other means.
While repurchase activity depends on factors such as Allscripts’ working capital needs, cash requirements for investments, debt repayment obligations, stock price, and economic and market conditions. According to the stock repurchase program, there is no guarantee to the exact number or value of shares that will be repurchased. And the stock repurchase program may be accelerated, suspended, delayed, or discontinued at any time.
The healthcare giant has also named a new chairman days after firing its previous chairman. Allscripts announced that former CEO of CNA Financial (NYSE:CNA) Dennis Chookaszian is the new chairman of the company. Chookaszian has been on the board of Allscripts since September 2010.
Company stock declined 36 percent on Friday, following Allscripts reported earnings well below expectations and the firing of Chairman Phil Pead. The company has also seen recently seen the departure of three directors from board. The resignations followed deliberations by board members in recent days on the leadership of the company. Currently, Glen Tullman remains Allscripts CEO.