MALVERN,
Pa. – November 20, 2007 – IKON
Office Solutions (NYSE:IKN), the world’s largest independent channel for
document management systems and services, today announced that its Board
of
Directors has approved the repurchase of $500 million of its common
stock. IKON intends to repurchase up to $295 million of its common
stock through a modified “Dutch Auction” self-tender offer at a price of not
less than $13 per share or more than $15 per share. The minimum
tender price represents a premium of approximately 21% over IKON’s closing stock
price of $10.77 on November 19, 2007. The tender offer is expected to
commence on November 21, 2007, and will be subject to certain conditions,
including the receipt of financing.
The
Company plans to repurchase the difference between $500 million and the
amount
repurchased through the tender offer during the balance of fiscal
2008. The rate and pace of these share repurchases will be subject to
financing and market conditions, as well as applicable regulations.
Today’s
announcement follows an increase by IKON’s Board of Directors of its share
repurchase program authorization to $1.1 billion in total. Since
program inception and assuming completion of the $500 million share repurchase
plan, IKON will have repurchased nearly $1 billion of its shares under
its share
repurchase program. The Company plans to finance these share
purchases through a combination of cash and incremental borrowings.
IKON
also
announced that it has entered into an amended confidentiality agreement
with
Steel Partners II, L.P., pursuant to which Steel Partners has agreed to
refrain
from taking certain actions with respect to its investment in IKON through
May
2009, subject to completion of the pending repurchase plan.
“We
are
returning immediate value to our shareholders through this tender offer,” said
Matthew J. Espe, IKON’s Chairman and Chief Executive Officer. “Our
share repurchase program has been an integral part of our capital strategy
for
several years, and the decision to accelerate this program reflects our
belief
that our shares are currently undervalued. We are also pleased to
announce our agreement with Steel Partners, who remains supportive of our
ongoing repurchase strategy.”
The
Company plans to provide an update on the expected impact of the share
repurchase plan, including any associated non-recurring charges, as well
as related guidance for fiscal year 2008 during its earnings conference
call in January 2008. The Company does not expect the tender offer to have
a material impact on its first quarter fiscal 2008 financial results, excluding
any non-recurring charges it may incur.
This
press release is for informational purposes only and is not a recommendation,
an
offer to buy or a solicitation of an offer to sell shares of IKON’s common
stock. This press release also does not constitute an offer to sell
or the solicitation of an offer to buy any securities of IKON.
Upon
commencement of the tender offer for shares of common stock, IKON will
file with
the Securities and Exchange Commission a tender offer statement on Schedule
TO
and related exhibits, including the offer to purchase, letter of transmittal,
and other related documents. Shareholders should read the offer to
purchase, the tender offer statement on Schedule TO and related exhibits
when
such documents are filed and become available, as they will contain important
information about the tender offer for shares of IKON’s common
stock. Shareholders can obtain these documents when they are
filed. These documents will be available free of charge on the
Securities and Exchange Commission’s website at www.sec.gov, and from
IKON.
