Diageo has revealed plans to continue its share buyback programme during its upcoming close period.

The company announced today (23 June) that it has put in place an irrevocable, non-discretionary programme allowing the company to buy back shares during the close period between tomorrow (24 June) and 1 September, when it will release its preliminary results. This is the first time that Diageo has established such a programme.

The buy backs will be in accordance with Diageo's general authority to repurchase shares and in accordance with both Chapter 15 of the current Listing Rules and Chapter 12 of the proposed new Listing Rules that will come into effect on 1 July. "Consequently the maximum price paid will be limited to no more than 105% of the average middle market closing price of Diageo shares for the 5 dealing days preceding the date of purchase," Diageo said. The shares repurchased will be held as Treasury shares.

"In announcing this, Diageo confirms that currently it has no unpublished price sensitive information," the company added. As in previous years, Diageo will issue a statement in respect of the year to 30 June on 7 July and will announce preliminary results for the year on 1 September.

Separately, the drinks giant said that Moody's and Standard and Poor's have both issued credit ratings in respect of a proposed refinancing of Burger King Corporation (BKC) debt. Diageo holds US$212.5m of subordinated loan in BKC and provides a guarantee in respect of US$750m of senior debt and US$100m of revolving credit facilities.

"Any refinancing of BKC would lead to the termination of Diageo's guarantee and the repayment of the subordinated loan together with accrued interest," the company concluded.

When contacted by just-drinks, a spokeswoman for Diageo explained the reasoning behind the continuation of the buyback programme during the closed period. "This provides a more consistent programme for returning capital to our shareholders," she told just-drinks.

"Our 2005 share buyback programme is running a little behind schedule," she added, "as we were unable to make any (buyback) transaction while in negotiation (with Pernod Ricard) to buy Bushmills."