Home Capital Group’s plan to buy back as much as $115 million worth of its own shares has fallen well short of expectations.
In a release Wednesday, Home Capital said it secured about 1.5 million shares for repurchase, to the tune of $44.3 million , significantly less than its intended goal.
“While we were able to return $44.3 million to participating shareholders, the fact that the tender offer was not fully subscribed indicates that many of our shareholders see the potential for additional upside value in our shares,” he said. The share buyback was announced August 8 as a Modified Dutch Auction – where investors tender shares for potential purchase at their chosen price in a given range by the company, in this case between $25.20 and $28.60 per share – but shares of the company have risen to the high-end of the range since the initial announcement.
In an email to BNN Bloomberg, Veritas analyst Nigel D’Souza said that bid and the recent price action in Home Capital shares likely contributed to the undersubscribed buyback.
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