RE:RE:We are taking it in the butt literally. I have read the business acquisition report and what I write below is my understanding.
The company can buy back 50% of the preferred shares at any time but at a premium. They can buy back all starting after 3 years but at a premium. That premium reduces to zero after the 6th anniversary. At this point the dividend will increase. So I think this will be the time to buy back the preferred shares given the cost of the premium. The dividend on the preferred shares is part of the deal. What firm would invest $291 million with no return? 8.75% seems resonable to me especially given where interest rates have gone since the deal went through.
I'm assuming this firm still has their common stock and warrants as part of the deal. If so, it is in their best interest for the stock price to increase.
The company is buying back its stock. At the current price I think this is the correct action. As a side note, as of next year, I believe the government intends to tax stock buybacks (2%).