Scholastic (NASDAQ:SCHL) ticked higher Monday after announcing its intent to repurchase $150 million of its stock in a modified Dutch auction.
Under the deal, which starts September 27, holders of Scholastic common stock will have the opportunity to tender some or all of their shares at a price within the range of $27 to $31 a share.
Slightly over 5.5 million shares will be repurchased at most, representing 16.2% of its currently outstanding common stock.
Scholastic will fun the transaction using available cash and temporary drawings on its existing credit facility.
The low and high ends of the price range reflect a 5.8% and 21.5% premium, respectively, to Wednesday’s closing price of $25.51 a share.
The New York-based company’s chief executive, Richard Robinson, said the offering is intended to return cash to shareholders in addition to its current dividend.
Meanwhile, the children’s publishing, education and media company said Monday that it widened first-quarter loss.
Scholastic posted net loss of 35.2 million, or 95 cents a share, compared with a loss of $23 million, or 68 cents a share, in the same quarter last year.
First-quarter revenue was $290.9 million, down from $315.6 million in the prior-year period, and missing the Street’s view of $329.2 million.
Despite the loss, Scholastic affirmed its fiscal 2011 outlook for revenue in the range of $1.9 billion to $2 billion, and earnings in the range of $1.95 to $2.20 a share.