Trading in shares of Medtronic (NYSE:MDT) was temporarily suspended today as the medical device titan revealed its plan for spending a $9.3 billion windfall from its $50 billion acquisition of Covidien, including a $5 billion share buyback by the end of April 2018.
Fridley, Minn.-based Medtronic said it has $9.3 billion to spend as a result of the Covidien integration, and plans to use most of the rest to pay down debt as it looks to regain its A credit rating. The company committed to returning at least 50% of the $9.3 billion to shareholders, either through dividends or buybacks.
Medtronic said it plans to execute the share buyback “with a bias toward repurchasing shares earlier within the time period.”
The company also said it’s once again raising the low end of its earnings guidance for fiscal 2016, saying it now expects adjusted EPS of $4.36 to $4.40, up from $4.33 to $4.40 previously, and reiterated its top-line guidance for the upper half of its prior 4% to 6% prediction.