STUDENT TRANSPORTATION INC 5.25 PCT DEBS T.STB.DB.A

Application to increase normal course issuer bid

[nav2006]

Student Transportation Announces Amendment of Normal Course Issuer Bid

 

BARRIE, Ontario, Aug. 27, 2015 (GLOBE NEWSWIRE) -- Student Transportation Inc. ("STI") (TSX:STB) (NASDAQ:STB) announced today that the Toronto Stock Exchange (the "Exchange") has approved an amendment of STI's normal course issuer bid for a portion of its common shares ("Common Shares").

As announced on October 21, 2014, under its current normal course issuer bid STI is permitted to acquire up to a maximum number of Common Shares equal to the lesser of 4,158,553 Common Shares, being 5% of the issued and outstanding Common Shares as of October 14, 2014, and that number of Common Shares that can be purchased under the normal course issuer bid for an aggregate purchase price of C$5 million in the 12-month period commencing October 24, 2014 and ending on October 23, 2015. Pursuant to the amended normal course issuer bid, STI can now purchase up to 6,505,109 of its Common Shares, representing 6,806,591 (or 10% of the public float as of October 14, 2014) less 301,482 Common Shares that have already been purchased under the normal course issuer bid. In addition, under the amended normal course issuer bid STI will not be subject to the $5 million maximum amount of purchases.

The TSX accepted notice of the amended normal course issuer bid on August 27, 2015 and the amendment will take effect on September 1, 2015.

Commenting on the amendment, CEO Denis Gallagher stated, "Amending our normal course issuer bid to increase the amount of common shares that can be repurchased allows us to take advantage of an opportunity to buy back shares at a time when we believe that the trading price of our shares is significantly below their intrinsic value based on the fundamentals of our business. Since our offering in March 2015, when we issued shares at a significantly higher price than current trading levels, we have reduced our debt and improved and grown our business. We believe that current market conditions provide an opportunity to buy back and cancel shares in circumstances that are in the best long-term interests of our shareholders and the company."

[scarface9]

Don't get me wrong, I like companies buying back their shares.  My question is why did they increase the NCIB? What were the odds they were going to buy back the original limit of 4,158,553 Common Shares or even the new limit of 6,505,109? Do the math. That would be $20 to 30 million dollars in buybacks. Do they have that much cash on hand?

[d_trump]

The original NCIB limit was the lesser of 4.1M shares and $5M, so in reality the old limit was about 900,000 shares.  Under the amendment they have done away with the $5M cap.   Still unlikely to need it but maybe they just wanted more flexibility.

[BlueCollar51]

Something doesn’t add up.   They still had lots of room to buy shares on the NCIB before it expires on Oct 23 2015.   Unless I missed it the NCIB still expires on Oct 23 2015 which is in abt. 7 weeks.   Why do they feel they need to double the amount of shares that they could buy under the existing NCIB with no $ limit for a 7 week program?   The other question that comes to

[BlueCollar51]

PS; The only thing that I can think of is that possibly they are going to purchase a Large Block of shares from someone. SNCF perhaps? As Always; Do Your Own Due Diligence; It’s Your Money !!

[jammo71]

At the end of June, STB retired almost $50M in debt, using money raised in an equity offering in March at a share price of $7.20. If this improvement to their balance sheet will allow them to get a credit line, or some other form of low-cost debt, then they could max out the buyback at these low levels. If they do, they will have in effect sold shares at $7.20 and bought them back under $6

[TheDude]

Exactly jammo...and with that hopefully a decent pop in the share price from these sickly levels. Good for everyone :)

[b4545]

Hey dud, do you have any stocks in the green? All of your posts seem to be negative angry moaning about how stupid the management teams are of the cos you have invested in. With all your picks in the red, who really is the stupid one? I guess when these bull boards is the extent of your DD, you can expect the pumpers to be taking your money to their banks. The more you post on these boards, the

[TheDude]

This post has been removed in accordance with Community Policy

[b4545]

Stop stalking me ya homo! . Do you have something against homosexuals dud? Tsk tsk.