It sticks in my throat that we are buying out Sheretz at $20 when the stocked closed at $18.36 on Friday. Why pay a premium??? If anything Sheretz should be paid at a discount to the market, say $17/share. If Sheretz doesn't like the discount, then let her sell her shares in the open market like I have to do when I sell my shares. I don't get any special deal from the company when I want to sell. Arkr recently did a similar buyback from a big shareholder and they paid a discount to the market price. I wish I could vote against this deal.
on an adjusted basis they didn't pay her $20/sh. She assumed a $35m preferred piece, which has to be discounted when valuing the transaction. Essentially they paid her around $18/sh for her stock. Issuing the redeemable preferred was very favorable to BBSI and its shareholders. They can easily pay it off before the interest rate hits 9%. We are left with a stock trading at 12x PE with a high teens FCF yield and 20-25% sustainable EPS growth. $18 is a great price to accumulate shares.
YOU GUYS..... The Board knew they couldn't keep their high paying jobs if the fight went on. They had no choice but to buy her out- at any price. In a proxy fight, they couldnt have garnered enough votes to overcome such a large voting block. They simply used our money to solidify there jobs for life. And so what if the Company sold out at a big premium, isn't that what the stock market all about?
Stop being a baby about this Finsamhill. They didn't pay a significant premium (and the shares were depressed due to the pending proxy fight anyway). This paves the way for the stock to move into the 20's. If you're unhappy with BBSI, sell your shares. But to cry about Sheretz selling a control position for slightly above market and suggest alternatives is unrealistic. The estate was clearing pushing to elect their slate of directors in order to facilitate a buyout. Or they were looking for some leverage to negotiate an exit. You're also overlooking the fact that they are buying out 30% of the CSO at a significant discount to intrinsic value (which in my opinion is in the 30's). The money is likely well spent, assuming they move quickly to redeem the preferred.