Candice Cooke, United States - April 2021
Sallie Mae (NASDAQ: SLM) buys back $28.5M shares in modified Dutch auction, lifts to 4.1%
Student loans company, Sallie Mae, commences buyback programme through modified Dutch auction; Buys ~$28.5M in common stock shares.
The market-leading credit services and lending provider, Sallie Mae, announced Feb 2 that it was launching a $1 billion stock buyback program. The target for the buyback surpassed previous efforts including a $600 million stock repurchase that occurred last year.
The buyback was conducted by means of a modified Dutch auction which allows shareholders to select the price (within a specified range) and the number of securities they wish to tender.
After the preliminary results of the programme, the company announced a decision to buy just ~$28.5M in common stocks, less than half what it had offered to repurchase. The company will pay $16.50 per share for an aggregate cost of ~$470.6M. These shares represent ~7.8% of Sallie Mae's common stock shares.
Investors seem to be willing to hold onto their stock, suggesting confidence that the price will rise above the offer price.