Diageo serves up third phase of capital return programme

The FTSE 100 maker of Guinness and Don Julio had already repurchased shares worth £2.25bn in the first two phases of the programme, which were completed on 31 January 2020 and 11 February 2022.

It said on Monday that it has entered into a non-discretionary agreement with UBS to enable the company to buy back shares worth up to a total of £1.7bn, of which £1.4bn would be completed by 30 June.

The agreement with UBS began on Monday, and would end by 5 October, with the board explaining that the repurchases were intended to reduce the company’s share capital.

All shares repurchased under the agreement would be cancelled.

Further execution phases of the capital return programme, using “the most appropriate mechanic” of either share buybacks or special dividends depending on market conditions, would be subject to future announcements, the directors added.

“UBS will make its trading decisions in relation to Diageo's securities independently of and uninfluenced by Diageo,” the firm said.

“Any repurchase of shares by Diageo contemplated by this announcement will be carried out on the London Stock Exchange, or other recognised investment exchanges.”

Diageo said the new phase of the programme, under which up to £1.7bn of shares would be repurchased, was taking place within the limitations of its existing general authority to repurchase up to 233,611,282 shares, which was granted by shareholders at the 2021 annual general meeting.

After taking account of the number of shares bought back under the second phase of the programme, the maximum number of shares that could be bought back under the third phase would be 217,037,150.

At 0917 GMT, shares in Diageo were up 0.26% at 3,667.9p.