Apple in Talks With Greenlight Over Cash

Apple just announced that it is in talks with Greenlight Capital about finding a way to distribute cash to shareholders. Apple shares rose by $13.55, or nearly 3 percent, on the news.

In a statement issued a few minutes ago, Apple said it is in “active discussions about returning additional cash to shareholders,” and said it would “thoroughly evaluate Greenlight Capital’s current proposal to issue some form of preferred stock.”

The talks come as Greenlight Capital has sued Apple over a plan its CEO David Einhorn says could generate as much as $32 a share through the issuance of preferred stock.

Einhorn launched a public campaign today alongside the lawsuit, urging Apple shareholders to vote against a proposal in Apple’s proxy that he argued would eliminate preferred stock from the corporate charter.

In its statement, Apple disputes Einhorn’s view of the proposal, the second going before shareholders on its latest proxy statement: “As part of our review, we will thoroughly evaluate Greenlight Capital’s current proposal to issue some form of preferred stock. We welcome Greenlight’s views and the views of all of our shareholders.”

Apple’s hoard of cash — it counts both cash and short- and long-term investments in its cash position — has grown substantially in recent years to north of $137 billion as of its most recent quarter ended in December. The cash, easily the largest among tech companies, and among the highest cash positions of all corporations in the world, comes from Apple’s considerable generation of free cash flow: $23 billion went straight into its coffers last quarter alone, and it hasn’t had debt for years.

Last year, Apple initiated a quarterly dividend payment to shareholders of $2.65 a share in partial reaction to shareholder outcry.

Here’s the full statement from Apple: