FX brokerage group Gain Capital Holdings Inc, a renowned company that owns the FOREX.com and City Index forex brands, is planning to acquire $50 million shares from its common stock. Further, the company announces to start a customised Dutch auction and achieve this feat.
Gain Capital has taken the decision all of a sudden. The dropping in the trading volumes due to low market volatility and strict regulations that have been recently placed on the online trading platform in EU by ESMA is to blame for this recent development.
The company has decided to buy back the shares at a price range between $7.24 to $7.94 per share. Also, there will be no hiding of any tax or hidden charges. And the sellers will buy the share in this case. It also had terms and conditions described in the offer letter as well as in the letter of transmittal. Plus, a price range at the time of Dutch auction. And it stands at a 5-15% premium as per the price of the stock in New York Stock market on the last day before the offer commences.
The offer is scheduled to expire at 5:00 pm on November 6 of this year. But the company can extend in case it wished so.
The CEO of Gain Capital said in his recent statement:
“The Offer underlines our ongoing commitment to executing a balanced capital allocation strategy to enhance shareholder value. Given our strong capital position, particularly in light of the $85 million in proceeds generated from the sale of the GTX business. With current market price of common stock, we believe the Offer is a prudent means to return capital to shareholders. Our strong capital position also allows us to make appropriate investments to pursue growth initiatives, consistent with our goal of delivering long-term value”.
According to the company, the Dutch auction allows shareholders a chance to auction all or a part of their shares. Now, they can receive a return or the full amount that they have invested in Gain Capital. This will help them to obtain liquidity without misbalancing the share price.
No member of Gain Capital does not recommend nor discourages the shareholders from participating in the auction. Further, the D.F. King & Co will act as the information agent and the Jefferies LLC will act as the deal manager.