So they couldn't entice any shareholders to tender when the offer was $36 or less. Duh!! The stock has been trading 10% or more over their offer. So they extend the date of the offer today. Not sure what that will accomplish. Hope this exercise is not costing them a lot in banker and lawyer fees. But my guess is that this is costly and a total waste. Management becomes less impressive with each action.
The company had M$50 on their balance sheet. They could have easily made a one time dividend and would have avoided an outrageous interest rate on unneeded debt. You may believe that EBITDA is a better valuation approach. I much prefer to look at free cash flow. Nathan's killed that metric when they decided to ship M$13.5 annually to bondholders.
With the stock trading above $36, not sure who would tender there shares as part of Nathan's Dutch Auction offer between $32 & $36. Is this another ill-conceived financial engineering exercise? I wish they would save all their cash and retire the debt when the bond covenants permit.
I attended the meeting. Some quick observations:
1) Management's (Lorber) answers to why they undertook the large debt financing was entirely uninformative. Some notion that it made good tax sense. But no willingness to disclose any strategic rationale. It was frustrating to have such ambiguous responses.
2) No mea culpa on the big loss in shareholder value following the debt issuance. Just some shoulder shrugging and comments that stocks go up and down. Nathan's just followed the recent market downturn. Of course Nathan's big decline has everything to do with the financial reengineering. So the answer was #$%$.
3) No clear insight with their plans for the M$60 of cash on the balance sheet. Stock buyback? Another dividend? Acquisition? All very wishy washy to any of these. I'd like them to retire the debt but never heard that mentioned.
4) Impression that current quarter business performance is good with help on margins from improving beef prices.
Management was friendly and polite to the few investors in the room. But definitely not a great interest in "really" sharing any details on some of the key concerns of shareholders. I didn't leave the meeting feeling it was time to load up on new shares. In fact, just the opposite.
Also interesting that Howard Lorber received over 500K shares against his reappointment. Considering that he owns 22% of the company, a very significant portion of outside shareholders voted against him. My impression of his personality is that he could care less that he received this vote of "no confidence."
Sadly, no real answers, no hot dogs to munch on and miserable traffic to get to the meeting.