Del Monte Foods has repurchased around 6.2m shares of its common stock in connection with an accelerated stock buyback (ASB) arrangement with Goldman, Sachs & Co.

The company is purchasing these shares as part of its three-year US$350m share repurchase programme that it announced two weeks ago.

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“Repurchasing shares is consistent with our confidence in Del Monte’s long-term growth prospects,” said Richard Wolford, chairman and CEO of Del Monte Foods.

“As we evaluated our alternatives, we concluded that an accelerated stock buyback programme was an effective avenue to return value to shareholders. Importantly, we are able to do this while achieving our leverage targets, continuing to invest in our business, and increasing our quarterly dividend by 80%. We feel good very good about the health of the business and our future.”

Under the buyback arrangement, the company will pay $100m to Goldman Sachs from available cash on hand on 25 June to purchase outstanding shares of its common stock, and it will receive a substantial majority of the shares expected to be delivered under the ASB on that date.

The ASB has enabled the company to repurchase the approximately 6.2m shares immediately.

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“The specific number of shares that the company ultimately will repurchase in this transaction will be based generally on the average of the daily volume-weighted average share price of the company’s common stock over the duration of the transaction and is subject to other adjustments pursuant to the terms and conditions of the ASB,” Del Monte explained.

The ASB contemplates that final settlement is expected to occur in September 2010, although the completion date may be accelerated or extended.

At settlement, the company may be entitled to receive additional shares of its common stock from Goldman Sachs or, under certain circumstances, may be required to deliver shares or make a cash payment (at its option) to Goldman Sachs.