SuRo Capital Corp. Will Commence a Modified Dutch Auction Tender Offer to Repurchase up to 2 Million Shares of its Common Stock
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Insights
The announcement by SuRo Capital to commence a modified Dutch Auction tender offer to repurchase up to 2 million shares of its common stock represents a strategic move to enhance shareholder value. This decision comes in light of the company's perception that its stock is undervalued when compared to the net asset value (NAV). The buyback is poised to be accretive, meaning it is expected to contribute positively to the company's earnings per share (EPS) by reducing the number of shares outstanding, hence potentially increasing the stock price.
From a financial perspective, the use of available cash for the tender offer indicates a strong balance sheet and liquidity position. However, it is important to consider the opportunity cost of this capital deployment, as the funds could alternatively be invested in growth opportunities or used to pay down debt. The announced price range of $4.00 to $5.00 per share will need to be evaluated against the current market price and historical performance to assess the attractiveness of the offer to shareholders.
Market reaction to tender offers can often be positive, as they typically signal a company's confidence in its own stock and can lead to a reduction in the supply of shares, potentially driving up the share price. The modified Dutch Auction format allows SuRo Capital to determine the lowest price within the specified range to buy back shares, which can be advantageous for the company in terms of cost-efficiency. It's crucial to monitor the market's response to such corporate actions, as it reflects investor sentiment and can influence the success of the tender offer.
Furthermore, the impact on the stock's liquidity post-offer is a point of interest. A reduction in float can lead to higher volatility in the stock price. Additionally, the company's future plans regarding potential additional tender offers or other shareholder value enhancement strategies will be closely watched by the market, as they can indicate the company's long-term commitment to capital return strategies.
From a legal standpoint, the tender offer process is highly regulated. SuRo Capital must adhere to the rules set forth by the Securities and Exchange Commission (SEC), including filing the Tender Offer statement on Schedule TO and providing the Offer to Purchase and related materials to shareholders. These documents are crucial as they contain detailed information about the terms and conditions of the tender offer, ensuring transparency and compliance with securities laws.
It is also important to note that the tender offer is subject to certain conditions which have not been disclosed in the announcement. These conditions could range from regulatory approvals to certain financial thresholds being met. The fact that the offer is not contingent on a minimum number of shares being tendered provides flexibility for the company but also poses a risk if the participation rate is low.
Reaffirms Anticipated 2023 Year-End NAV of
NEW YORK, Feb. 14, 2024 (GLOBE NEWSWIRE) -- SuRo Capital Corp. (“SuRo Capital”, the “Company”, “we”, “us”, and “our”) (Nasdaq: SSSS) announced today that it will commence a modified “Dutch Auction” tender offer (the “Tender Offer”) to purchase up to 2 million shares of its common stock at a price per share not less than
“As we have consistently demonstrated, SuRo Capital is committed to initiatives that enhance shareholder value, and we believe the market is currently undervaluing our portfolio. Accordingly, on February 14, 2024, our Board of Directors authorized a modified Dutch Auction Tender Offer to purchase up to 2 million shares of our common stock at a price per share between
Modified Dutch Auction Tender Offer
On February 14, 2024, the Company’s Board of Directors authorized a modified “Dutch Auction” tender offer (the “Tender Offer”) to purchase up to 2,000,000 shares of its common stock at a price per share not less than
Based on the number of shares tendered and the prices specified by the tendering stockholders, the Company will determine the lowest per-share price that will enable it to acquire up to 2,000,000 shares of its common stock. All shares accepted in the Tender Offer will be purchased at the same price even if tendered at a lower price.
The Tender Offer is not contingent upon any minimum number of shares being tendered. The Tender Offer is, however, subject to other conditions, which will be disclosed in the Tender Offer documents. In the future, the Board of Directors may consider additional tender offer(s) or other measures to enhance shareholder value based upon a variety of factors, including the market price of the Company’s common stock and its net asset value.
The Company’s Board of Directors is not making any recommendation to stockholders as to whether to tender or refrain from tendering their shares into the Tender Offer. Stockholders must decide how many shares they will tender, if any, and the price within the stated range at which they will offer their shares for purchase.
The information agent for the Tender Offer is D.F. King & Co. Inc., and the depositary is Equiniti Trust Company, LLC. The offer to purchase (the “Offer to Purchase”), a letter of transmittal and related documents will be mailed to registered holders and certain of our beneficial holders. Beneficial holders may alternatively receive the Offer to Purchase and a communication to consult with their bank, broker or custodian, if they wish to tender shares. For questions and information, please contact the information agent. Banks and brokers may call the information agent at (212) 269-5550, and all others may call the information agent toll-free at (877) 361-7972.
Certain Information Regarding the Tender Offer
The information in this press release describing the Company’s Tender Offer is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell shares of the Company’s common stock in the Tender Offer. The Tender Offer is being made only pursuant to the Offer to Purchase and the related materials that the Company will file with the Securities and Exchange Commission, and is distributing to its stockholders, as they may be amended or supplemented. Stockholders should read such Offer to Purchase and related materials carefully and in their entirety because they contain important information, including the various terms and conditions of the Tender Offer. Stockholders of SuRo Capital Corp. may obtain a free copy of the Tender Offer statement on Schedule TO, the Offer to Purchase and other documents that the Company will be filing with the Securities and Exchange Commission from the Securities and Exchange Commission’s website at www.sec.gov. Stockholders may also obtain a copy of these documents, without charge, from D.F. King & Co. Inc., the information agent for the Tender Offer, by calling toll-free at (877) 361-7972. Stockholders are urged to carefully read all of these materials prior to making any decision with respect to the Tender Offer. Stockholders and investors who have questions or need assistance may call D.F. King & Co. Inc.
Forward-Looking Statements
Statements included herein, including statements regarding SuRo Capital's beliefs, expectations, intentions, or strategies for the future, may constitute "forward-looking statements". SuRo Capital cautions you that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected or implied in these statements. All forward-looking statements involve a number of risks and uncertainties, including the impact of any market volatility that may be detrimental to our business, our portfolio companies, our industry, and the global economy, that could cause actual results to differ materially from the plans, intentions, and expectations reflected in or suggested by the forward-looking statements. Risk factors, cautionary statements, and other conditions which could cause SuRo Capital's actual results to differ from management's current expectations are contained in SuRo Capital's filings with the Securities and Exchange Commission. SuRo Capital undertakes no obligation to update any forward-looking statement to reflect events or circumstances that may arise after the date of this press release.
About SuRo Capital Corp.
SuRo Capital Corp. (Nasdaq: SSSS) is a publicly traded investment fund that seeks to invest in high-growth, venture-backed private companies. The fund seeks to create a portfolio of high-growth emerging private companies via a repeatable and disciplined investment approach, as well as to provide investors with access to such companies through its publicly traded common stock. SuRo Capital is headquartered in New York, NY and has offices in San Francisco, CA. Connect with the company on Twitter, LinkedIn, and at www.surocap.com.
Contact
SuRo Capital Corp.
(212) 931-6331
IR@surocap.com
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