NICHOLAS FINANCIAL RETAINS FINANCIAL ADVISOR
TO ASSIST IN EVALUATING STRATEGIC ALTERNATIVES
March 20, 2013 – Clearwater, Florida – Nicholas Financial, Inc. announced today that the Board of Directors of the Company has retained Janney Montgomery Scott LLC as its independent financial advisor to assist the Board of Directors in evaluating possible strategic alternatives for the Company, including, but not limited to, the possible sale of the Company or certain of its assets, potential acquisition and expansion opportunities, and/or a possible debt or equity financing.
The Company also announced today that it has received an unsolicited, non-binding indication of interest from a potential third-party acquirer. The Company cautions its shareholders and others considering trading in its securities that its Board of Directors only recently received the indication of interest, and that the process of considering this proposal as well as other possible strategic alternatives for the Company is only in its beginning stages. The Board of Directors will proceed in an orderly and timely manner to consider possible strategic alternatives for the Company and their implications. Accordingly, no assurances can be given as to whether any particular strategic alternative for the Company will be recommended or undertaken or, if so, upon what terms and conditions. The Company currently does not intend to make any further public announcements regarding its Board of Directors’ review of possible strategic alternatives until this evaluation process has been completed.
"Peter" can cash our, bequeath his shares and otherwise live on the fruits of his work without selling the entire company. he may be the largest shareholder and C.E.O., but this is our company too, not just his.
For all practical purposes, he decides if & when the company will be sold.
Unless you can turn his entire board against him....which would probably take 2/3 of the shareholders and thats not going to happen. He has done a great job and we have no reason to doubt him if & when he decides to sell.
And, who knows, maybe they decide against a sale and take on some more debt and maybe do a tender offer at slightly above market for some amount of shares. That way those who want to cash out could and those who dont, arent forced to.
NICKs track record is such that a significant amount of more debt might not be the worst thing in the world for them. Assuming they maintain their underwriting discipline.
But, I still think a sale is likely. That could mean within 6 months or 2-4 years.
Im afraid that many of us wont be around in 30 years. I hope I am but probably not.
But Peter probably wont be and who coulld blame him for selling out & enjoying the fruits of his career ?
I think it all depends on the premium someone is willing to pay.
There have always been interested parties.But will anyone step up & offer what it would take for Peter to sell ?
Im going to give them the benefit of the doubt. Whatever they decide works for me.
But thats easy for ME to say. My cost basis is peanuts.
Not saying that to brag because I think I would have been FAR better off buying CACC instead of NICK.
But CACC really leaves a bad taste in my mouth. I remember 20 years ago when I was a wholesaler going through the repo lines at Adesa and every week seeing a handful of CACCs repos. Nearly every one was prior salvage and the body work looked like it was done by a blind, #$%$ 12 year old.
I presume they quit financing previous salvage or lowered what they pay considerably. But, I havent been to adesa regulary in at least 15 years.
Not going to get too excited until there is a real offer. We had a "Strategic Alternatives Review" two years ago and the stock has done somewhere between jack and #$%$ since that didn't happen. The company has been good to me and I will be sad to see it go if it truly does, but there was a big tease once, whose to say it's actually real this time?
My impression is the company has always been for sale....for the right price.
And there have been and continue to be multiple parties interested.
It all comes down to will they pay what Peter wants.
While the 2 year chart doesnt look great compared to the broader averages, we have collected about $2.76 per share in dividends since then.
I suspect when that $2.76 is added back, its been a good stock to hold.
Take a look at the 5 year chart and see if you agree !