Amid news that Nokia plans to purchase Juniper (JNPR), the company has announced a more than $2 billion buyback plan — leading JNPR stock to increase pre-market by 2%.
Juniper will initiate a $0.10/share quarterly cash dividend in Q3 of this year — with the intention of growing its payout over the next three years, via a combination of share repurchases and dividends.
The company said it will pay out more than $2 billion on buybacks through Q1 2015. (via SeekingAlpha)
As part of buyback efforts, Juniper plans to enter into a $1.2B accelerated share repurchase agreement. Between dividends and buybacks, the company plans to return at least $3B over the next three years.
The overall plan is to create a new “One-Juniper” corporate structure with the goal of attaining a yield of $160 million a year in savings by 2015.
Reuters reports that the hedge fund said the “undervalued” stock could be worth $35-$40 “if Juniper implemented its suggestions and focused on revamping its core business of making routers and switches for mobile carriers such as Verizon Communications Inc and AT&T Inc.”
The decision comes amid rumors that Nokia is planning to purchase the company.
Reuters reports that Finland’s Nokia is considering buying the U.S.-based Juniper in order to merge into its telecommunications network gear business.
Juniper has a stock market value of $13.7 billion, making it a major takeover target for Nokia, but Manager Magazin said Nokia could use Juniper’s $3.1 billion cash to help finance the purchase. NSN will be Nokia’s primary operation after the sale of its devices and services business to Microsoft in a 5.4 billion euro ($7.4 billion) deal, which is expected to close by the end of next month.
Juniper Networks designs, develops, and sells products and services that together provide its customers with network infrastructure.