Planet Fitness, Inc. announced that it has entered into a $280 million accelerated share repurchase agreement (ASR) with Citibank, N.A.. The company will acquire shares under the ASR Agreement as part of its $500 million share repurchase authorization previously announced on November 8, 2022.

As of June 13, 2024, before giving effect to the ASR Agreement, approximately $355 million remained available for share repurchases under the 2022 Share Repurchase Program.

Per the terms of the ASR Agreement, the company will pay the Bank $280 million in cash and will initially receive approximately 3.1 million shares of the company’s Class A common stock, or roughly 80 percent of the shares of the company’s Class A common stock it expects to repurchase under the ASR Agreement.

The total number of shares to be repurchased will be based on the average of the daily volume-weighted average prices of the company’s Class A common stock during the term of the transaction, less an agreed discount and subject to potential adjustments pursuant to the terms and conditions of the ASR Agreement.

At final settlement, the Bank could be required to deliver additional shares of Class A common stock to the company, or under certain circumstances, the company may be required to deliver shares of Class A common stock or to make a cash payment at its election to the Bank.

The final settlement of the transaction under the ASR Agreement is expected no later than the third quarter of 2024.

The company also announced that its Board of Directors had authorized a new share repurchase program of up to $500 million, contingent on the ASR Agreement’s completion, to replace the existing 2022 Share Repurchase Program.

Image courtesy Planet Fitness