Company Town : Analysts Like DuPont Move to Buy Back Shares

Wall Street investors and analysts on Thursday applauded DuPont Co.’s agreement to buy back $8.8 billion worth of DuPont shares from Seagram Co. in one of the largest share buybacks in history.

The deal will allow DuPont to raise earnings per share by about 10%. DuPont stock rose $1.50 to $64.75 on Thursday.

Analysts said DuPont’s ability to finance such a large payment underlines its success in eliminating unprofitable enterprises and cutting costs over the past three years. James H. Wilbur, a managing director at Smith Barney, said a buyback of such size will require DuPont to sell even more assets “to get its balance sheet back in order,” and DuPont officials confirmed that view.

In a letter to employees released Wednesday night, DuPont Chairman and Chief Executive Edgar S. Woolard Jr. said that to finance the deal, “we must sell some of our assets” as well as have a “quick turnaround of some debt and the sale of some common stock.”