M&A abbreviation - mergers and acquisitions, on wooden cubes on a light background.


Nastassia Samal

Home Capital Group (TSX:HCG:CA) said Monday its board decided to reject an expression of interest to acquire the company because the proposed transaction doesn’t reflect the lender’s value. In addition, Home Capital will proceed with its previously announced offer to buy back C$115M (US$89) of its shares.

The non-binding expression of interest from an arm’s length third party contemplated paying C$28.60 (US$22.24) per HCG share. That reflects practically no premium to the shares’ closing price of C$28.58 on Friday trading.

After the board, with the aid of its financial advisers, BMO Capital Markets and TD Securities, and its legal advisers reviewed the expression of interest, the board found that it “undervalues the company’s shares and falls short of reflecting Home Capital’s intrinsic value and its future growth potential based on the company’s strategic plan and market-leading franchise,” the company said.

Home Capital (HCG:CA) said the third party hasn’t indicated whether it will submit any further proposals or otherwise attempt to acquire HCG shares.

Earlier this month, the company announced the C$115M substantial issuer bid, which is set to to expire on Sept. 13. Read or listen to HCG’s Q2 earnings call here.


Image and article originally from seekingalpha.com. Read the original article here.

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