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BB&T Corporation Message Board

  • studio.79mnm studio.79mnm Aug 4, 2008 8:14 PM Flag

    BBT bought the stock in a negotiated transaction/private placement

     

    you could have read the SEC filing.

    this is a common method for acquiring large blocks.

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    • studio,

      since it was a private placement it might not make a difference, but BBT didnt buy the stock, BBT issued new shares and sold then to the db plan. BBT did not acquire the shares. would the same hold true in this case?

      thanks

      • 2 Replies to d_wilson64
      • I was wondering if maybe BBT just facilated a transaction between a large stock holder and the DB plan? It seemed from the PR though BBT sold the shares.

        Can you elaborate on the possibilities in a negotiated placement.

      • Here's more info on the 2.45 million share deal which provides additional information involving this transaction not included in bbt press release or provided by ir. In addition to these shares there are an additional 8.3 million shares controlled by bbt as shown in their 13-F report. These shares could be part of bbt 401-k and/or other 401-k plans managed by bbt. Don't know.

        The article states that the bbt pension plan viewed the acquisition of these shares as a good investment opportunity. What an understatement! Bbt should have issued preferred shares and bought back the common at $21/ share. It's accretive to earnings up to $40 share. I take strong exception to the dilution of my equity although it's not materially. What's important is the principle of protecting shareholders. I particularly like the statement about using an independent appraisal firm.

        "NEW YORK, July 23 (Reuters) - BB&T Corp, (BBT.N: Quote, Profile, Research, Stock Buzz) a large Southeastern U.S. regional bank, said on Wednesday it sold $52.9 million of its shares to its pension plan, which viewed the stock as undervalued and a good investment opportunity.

        After the transaction, BB&T's $1.5 billion pension has about 5 percent of its assets in BB&T stock. Before, the pension's allocation was closer to 2 percent, a spokesman said.

        The average price for the shares sold in the transaction was roughly $21.51, or about 25 percent below the current price of $29.16. The transaction was completed on Tuesday, and was based on Monday's closing price of $25.91.

        The pension plan cannot sell the shares for six months after the transaction under U.S. Securities and Exchange Commission rules, so the lower price is meant to compensate the pension plan for that risk.

        The bank said the price at which the 2.45 million shares were sold was determined by an independent appraisal firm, and is subject to review by a representative of the pension plan.

        "There's an inherent risk in not being allowed to trade that stock for six months," spokesman Bob Denham said.

        Denham added, "The main driver for this (transaction) was that the pension plan thought it was a favorable investment opportunity."

        BB&T last week reported a 6 percent decline in second-quarter net income, signaling to investors that the bank was avoiding the major credit problems that have forced rivals to raise capital and cut dividends. (Reporting by Dan Wilchins; Editing by Derek Caney/Jeffrey Benko"

 
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