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Cullen/Frost Bankers, Inc. Message Board

  • janusdealer janusdealer Feb 13, 2013 8:33 AM Flag

    all that for a mere $150mil share count reduction?

    a major waste of cash for all those fees! Ridiculous! . why not just buy in $150mil in common shares. Why increase capital at 5.75% -plus fees....

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    • "The total number of shares that Cullen/Frost will receive and the total consideration paid ultimately will be determined based on the volume-weighted daily average price of its common stock during the repurchase program"
      It is possible that they are getting a better price buying the GS block than if they bought in open market, if the "volume-weighted average price" is actually somewhere in the mid-upper 50s. Also, they are paying 3.6% fee, not the usual 6% underwriting fee, depending on what the ultimate price is, this might not be a bad deal. They're not increasing capital, just replacing common equity with the preferred, or they might have their eye on an acquisition target that they can buy with the purchased shares instead of issuing new common.

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