Collector’s Universe, which runs PSA and PSA/DNA is offering to buy its stock from shareholders.
Collectors Universe, parent company of PSA and PSA/DNA, announced Tuesday that it is commencing a modified Dutch Auction tender offer to buy up to 1.75 million shares of its common stock, $.001 par value (including associated preferred share purchase rights issued under the Rights Agreement dated as of January 9, 2009 between the company and StockTrans, Inc., as the Rights Agent), at a price of between $5 and $5.40 per share. The maximum aggregate purchase price is approximately $9,450,000.
CU stock was up 65 cents per share to $5.20 on Tuesday.
The closing price of the company’s stock was $4.55 on Monday, the last trading day preceding the commencement of the tender offer. The mid point of the purchase range of $5.20 represents a 14.3% premium over the closing price. CU says the midpoint also represents a 17% premium over the volume weighted average price of the Company’s shares over the previous 15 business days and a 24.4% premium over the previous 30 business days.
The Company expects the tender offer to expire at 12:00 Midnight, Eastern Time, on July 2 unless extended or withdrawn. CU intends to fund the tender offer with cash on hand. At March 31, CU had approximately $20.8 million of cash and cash equivalents.
The modified Dutch Auction would allow the company’s stockholders to tender some or all of their shares at a price within the specified range and to do so without incurring any brokerage fees or commissions. Based on the number of shares tendered and the prices specified by the tendering stockholders, the company will determine the lowest price per share within the range that will enable it to purchase up to 1,750,000 shares, or such lesser aggregate amount of its shares that is properly tendered. All shares accepted in the tender offer will be purchased at the same price per share even if a stockholder tendered at a lower price. The Company reserves the right in the tender offer to purchase up to an additional 2% of its shares outstanding. The Company currently has approximately 9,158,343 shares outstanding.
The company’s executive management team and its Board of Directors are not participating in the tender offer.
Also on Monday, the Compensation Committee of the Board of Directors of Collectors Universe approved a management incentive compensation program for the fiscal year ending June 30, 2010 for its three executive officers, Michael J. McConnell, its CEO, David G. Hall, its President, and Joseph J. Wallace, its CFO. According to SEC filings, the primary purposes of the Program are "(i) to establish incentives that will focus management on achieving a turn-around in the Company’s financial performance in fiscal 2010, as well as providing incentives for them to remain in the company’s employ thereafter, (ii) to reduce the maximum compensation that the Participants can earn in fiscal 2010, as compared to fiscal years 2009 and 2008, and (iii) to reduce cash outflows by paying such incentive compensation in stock, rather than cash."
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