Limited to Buy Back Stocks to Return Cash to Shareholders

Limited Inc. said it will buy back as many as 85 million shares at a cost of up to $1.61 billion in a move designed to return cash to shareholders.

The fixed-price tender offer of $19 a share is designed to return cash from the $680-million initial sale of stock in its Intimate Brands Inc. and sale of its credit card bank unit last year. The tender offer begins Thursday and ends March 6.

“I think they made a good choice. It’s clearly a positive for the stock,” said Philip Abbenhaus, a retail analyst at Stifel Nicolaus. He said it is likely the offer will be fully subscribed.

The Limited, under a variety of names, operates 4,033 specialty stores. The company also controls Intimate Brands, which through Victoria’s Secret Stores, Bath & Body Works and others operates 1,291 specialty stores and distributes apparel internationally through the Victoria’s Secret catalog.

The retailer also said it expects to post full-year earnings of $305 million to $320 million, or 85 cents to 90 cents a share. That would be short of the 93-cents-a-share average earnings estimate from 30 analysts surveyed by First Call Corp.

The company said the estimate excludes gains from the restructuring efforts and are based on shares outstanding before the tender’s completion. Limited’s fiscal year ends Jan. 31.

In fiscal 1994, the company reported net income of $448 million, or $1.25 a share, on revenue of $7.32 billion.

In November, the Columbus, Ohio-based chain said third-quarter profit from operations fell to $43.8 million, or 12 cents a share, from $90.5 million, or 25 cents, a year ago. Revenue rose 5.1% to $1.80 billion from $1.71 billion.