RE:Thoughts on the SIB Price RangeHCG management looks just fine.
If you go back in history just a short 1.5 years, you have HCG trading about 80 million shares between April 24th and June 12 of 2017. Those are not even WB shares.
Shares went from 11.33, down to 6.68, and then recovered to 12.70
So there are a lot of shares sitting with substantial gains for 1.5 years.
It is good and fair for them to test the waters at 16.50 to 18.50.
See how it goes.
It's always easy to put more moeny on the table. They would look like fools if they overpaid for the shares. Good for them trying to low ball it as much they can.
Let's not forget the market was allowed to set the rate. And the market chose ~17.50
Regards
WBuffett1 wrote: Its quite conflicting, here's why:
- if you plan to hold your shares long term, you would want HCG to buy back as low as possible, so your share in HCG will increase substantially.
- BH and TC are long term shareholders, so they would probably want HCG to buy back at low price. But without their participation, it would be hard for HCG management to have any certainty in filling in the auction.
- HCG management will look like fools if they ended up getting only a small portion of their intended buyback amount.
- Remember, HCG is motivated to return the full amount of $300 million because their capital ratio would still be high even after the SIB.
- Now for BH, its only been a little over a year since their investment. They rarely hold investments for less than 5 years. Plus, the upper end of the price range is still a significant discount to book. I don't think BH will tender any shares.
- For TC, their average cost is above $20. It wouldn't make sense for them to tender any shares at the upper end of the range as well. They are not even breaking even at that price point.
- I hope BH and TC would announce their decision. I think what's happening now is HCG will now sound out BH and TC and see whether they will tender. HCG will probably ask them for their required price point and they will revise up the offer price range. just my guess