The Toronto Stock Exchange (TSX) recently gave a final approval to Imperial Oil Limited's IMO normal course issuer bid (NCIB) to buy back up to 5% of its 711-million outstanding common shares as of Jun 15, 2021.
This ceiling will be decreased by the amount of shares acquired from Exxon Mobil Corporation XOM, the dominant stockholder. Under the new program, ImperialOil's daily buy limit will be 312,512 shares or 25% of the average daily trading volume. The new one-year program will start on Jun 29, 2021 and end on Jun 28, 2022, if the business purchases the maximum number of shares allowed.
The sanction extends Imperial Oil's existing share repurchase plan, which will expire on Jun 28, 2021. This announcement demonstrates the company's commitment and capacity to return funds to its shareholders, consistent with its solid balance sheet, minimal capital requirements and robust cash generation. The NCIB is a tax-efficient and flexible means of dispersing excess liquidity to stakeholders who want to participate by selling their shares.
Meanwhile, ExxonMobil will be permitted to sell its shares to Imperial Oil outside the NCIB purview, but concurrently, in order to keep its proportionate share ownership at 69.6%. All shares will be bought through the Toronto Stock Exchange and other authorized exchanges as well as published marketplaces in Canada.
Imperial Oil had acquired 7,522,148 shares in the open market and 17,205,732 shares from ExxonMobil as of Jun 18, 2021 for a total cost of approximately $982 million and an average cost of $39.73 per share.
Brief on Imperial Oil
Founded in 1880, Calgary-based Imperial Oil is one of the largest integrated oil companies of Canada, mainly engaged in oil and gas production, petroleum products refining, and marketing and chemical business.
Zacks Rank & Other Key Picks
Imperial Oil currently flaunts a Zacks Rank #1 (Strong Buy). Other top-ranked players in the energy space include SilverBow Resources Inc. SBOW and Oasis Petroleum Inc. OAS, each presently sporting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
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