MG Holdings/SIP™ - Corporate Advisory
Intelligent Equity Finance™ for Undervalued Corporations
The Cashless Buyback™ - A Supplement / Superior Alternative to Corporate Share Repurchase Programs
Are you a director, CEO, CFO or Treasurer of a public company? Is your firm's equity substantially undervalued? Has your board authorized a stock repurchase program? A Cashless Buyback™ equity exchange offer can enable your firm to capitalize on undervaluation, expand or replace your buyback program, eliminate capital risk, make treasury a profit center, and sharply reduce director, officer and corporate liability for the 10b5-1 / 10b-18 / equity transaction conflicts that have attracted regulatory and legislative attention. A Cashless Buyback™ conforms to world-class governance best practices while offering attractions for 3 key constituencies: The firm itself, its shareholders and its management.
Principal Benefit: Capitalize on Undervaluation with Minimal Risk
Undervaluation is an opportunity, not a problem. For example, depending upon volatility and equity capital costs, a Cashless Buyback™ exchange offer can allow a company trading at $10 per share to sell stock at $65 per share as soon as its stock rises to a $30 target any time within 6 years (or, upon hitting the target, the company can instead repurchase 20% of its outstanding shares at a cost of $0, i.e. zero). Importantly, if the target is missed, the firm and its participating shareholders suffer no penalty - no debt, no interest, no cash outflow, no dilution. Tax and accounting are straightforward. Terms are highly flexible.
At initiation, a Cashless Buyback™ may dramatically reduce or eliminate short interest. Firms suffering illiquidity (daily volume below 2% of outstanding shares) will likely find trading substantially enhanced. Access to equity capital markets is improved.
Cut Treasury Management Expense
Have you measured your cash buyback commission expense? Gone the next step to measure your cash buyback program against VWAP (volume weighted average price) to determine efficiency? Gone one step further to measure performance? Have you considered the changing regulatory and litigation environment surrounding 10b5-1 / 10b-18 buybacks and, for instance, the conflicts with management stock options? A Cashless Buyback™ addresses these concerns to make your treasury strategic cash management program a profit center instead of an expense and liability risk.
We Partner with Your Banking Partners
MG Holdings/SIP does not compete with your existing bankers. Our products are proprietary*, and we can architect and execute transactions unassisted. Still, your bankers have earned your confidence. Whoever your bankers may be, we are ready to serve as their advisors if we serve you best by serving them.
Math, Not Magic™
Raise Equity Capital at 3x Spot
ReduceShare Buyback Costs
Make Treasury a Profit Center
Avoid 10b5-1 / 10b-18 Option Conflicts
Do it Riskless
MG Holdings/SIP™, Summit, NJ 07901 tel. 908 264-2545 --------------- *Patents Pending