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Royal Caribbean to buy back 3.5m Awilhelmsen shares

Awilhelsen was one of Royal Caribbean's founders in 1968
Tuesday updates: Royal Caribbean to pay $67.45 per share for 3.5m share repurchase, or about $236m. Wells Fargo Securities said the buyback is consistent with the company's stated objectives of returning to investment grade and returning excess free cash flow to investors. Royal Caribbean Cruises Ltd. said it has agreed to repurchase 3.5m shares of common stock held by Oslo-based Awilhelmsen AS. Concurrently, Awilhelmsen sold an additional 3.5m shares Monday to a financial institution.

The price Royal Caribbean will pay for its shares will equal the price paid by the financial institution to Awilhelmsen. The repurchase will be funded from Royal Caribbean's cash on hand.

RCL shares closed at $68.40 Monday, up 43 cents.

Following the sale and the repurchase, Awilhelmsen will beneficially own approximately 16% of RCL's outstanding common stock.

Royal Caribbean chairman and ceo Richard Fain said the board and management team see this as an opportunistic repurchase transaction which uses cash on hand, is accretive to per-share earnings and is beneficial to all RCL shareholders.

For Awilhelmsen's part, this gives an opportunity to diversify the company's investment portfolio while maintaining its significant position as the largest RCL shareholder, according to Awilhelmsen ceo Sigurd E. Thorvildsen.

Awilhelmsen was one of three founders of Royal Caribbean in 1968. It is a privately owned investment company established in 1939. Besides cruise, holdings currently include real estate, shipping & offshore, retail and financial investments.