On previous CC's several callers mentioned the idea of a stock buyback. MS said that as it is the float is not all that large and that rather than a buyback he would favor doing something bigger......was not specific other than that it would be a "recapitalization." At a minimum I think we will see the following:
1) announce the name of the CFO
2) creation of an additional board seat
3) dividend increase......new annual dividend will be at least 0.28 and possibly as high as 0.32.
Not sure what that means. Normally that would mean issuing new shares of new debt. Issuing new shares (especially at these levels) does not appear to make much sense and I don't see how that would be accretive?
Issuing new debt at lower rates to restructure existing higher rate debt to lower interest expenses might be an option?
Sale of assets would bring in a cash infusion.
A spin off would bring in a cash infusion.
Either one of these two options could result in a one time dividend payment to shareholders which could make Kellogg happy, or the cash could be used to snap up an undervalued asset they might have their eye on.
However while a following acquisition would likely increase BV even more it may or may not have much of an effect on the pps. I'm assuming Kellogg wants to explore ways to realize or unlock the value of his investment, and not just have the unrealized valuation of MFC increase.....
Or possibly he just wants more visibility and promotion to other potential investors, more transparency, roadshow presentations, they types of things that MFC has never been known for? The new website might be a first step towards that very welcome path, if so...
That could also unlock the value in MFC shares.