Red Hat Announces $325 Million Stock and Debenture Repurchase Program

Red Hat Announces $325 Million Stock and Debenture Repurchase Program

Red Hat, Inc. (NASDAQ: RHAT), the world’s leading provider of open source solutions to the enterprise, today announced that its Board of Directors has authorized a $325 million Stock and Debenture Repurchase Program. Under the program, the Company is authorized to repurchase in aggregate up to $250 million of the Company’s common stock and in aggregate up to $75 million of the Company’s 0.5% Convertible Senior Debentures due 2024. Repurchases of common stock and Convertible Debentures may be effected, from time to time, either on the open market or in privately negotiated transactions, as applicable.

“We believe this repurchase program is in the best interest of our shareholders,” said Charles Peters, Chief Financial Officer and Executive Vice President. “It underscores our belief in Red Hat’s future and represents an opportunity to enhance long-term shareholder value.”

The timing and the amount of any repurchased common stock and any Convertible Debentures will be determined by the Company’s management based on its evaluation of market conditions and other factors. Repurchases of common stock may also be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The repurchase program may be suspended or discontinued at any time. Any repurchased common stock will be available for use in connection with its stock plans and for other corporate purposes. All repurchased Convertible Debentures will be retired and canceled.

The repurchase program will be funded using the Company’s working capital. As of August 31, 2006, the Company had cash and investments in debt securities of approximately $1.0 billion. Red Hat had approximately 191 million shares of common stock outstanding as of September 30, 2006.

Read the complete Press Release