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Washington Federal (WAFD) Announces Dutch Auction Tender Offer
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Washington Federal (WAFD - Free Report) announced the commencement of a modified “Dutch auction” tender offer. The company said that it commenced a tender offer to purchase up to $290 million of its common stock in cash.
It will purchase the shares at a price not less than $26.50 per share and not greater than $31.00, less any applicable withholding taxes and without interest. The purchases will be made using the proceeds from its recent depositary shares offering.
Unless extended or terminated, the tender offer will likely expire at midnight of Mar 9, 2021.
Notably, in a modified “Dutch auction” tender offer, shareholders are allowed to indicate how many shares and at what price within the range described above do they wish to tender their shares. Then, based on the number of shares tendered and the prices quoted by the tendering shareholder, the company decides the lowest per-share price that will enable it to acquire the required number of shares.
All shares that are accepted in the tender offer are purchased at the same price, irrespective of whether they were tendered at a lower price.
In the case of Washington Federal, if the tender offer is subscribed fully, it will purchase shares between 9,354,838 and 10,943,396, or 12.3% and 14.4% of its outstanding common stock.
The directors and executive officers of the company will not tender any of their shares. In fact, any shares tendered can be withdrawn prior to the expiration of the offer.
Also, the tender offer is not contingent upon any minimum number of shares being tendered.
The “Offer to Purchase” and the “Letter of Transmittal” that the company files with the SEC will contain important information about the terms and conditions of the tender offer and these must be followed by shareholders.
Goldman Sachs & Co. LLC, a unit of Goldman Sachs (GS - Free Report) , is acting as the dealer manager for the tender offer.
Per Washington Federal’s board of directors, such a tender offer is an efficient way to provide all shareholders with the opportunity to tender all or a portion of their shares.
Our Take
Supported by a solid balance sheet position, Washington Federal has been continuously enhancing shareholder value through efficient capital deployment activities. Since fiscal 2011, the company has been increasing quarterly dividend on a regular basis, with the latest hike announced in January 2020.
It also has an efficient share-repurchase plan in place. While buybacks were suspended amid the pandemic, the company is expected to be able to sustain capital deployments in the future on the back of its earnings strength.
Over the past six months, shares of Washington Federal have gained 17% compared with the 38.4% growth recorded by the industry it belongs to.
Currently, the company carries a Zacks Rank #2 (Buy).
A couple of other top-ranked stocks from the finance space are mentioned below.
Interactive Brokers Group, Inc.’s (IBKR - Free Report) earnings estimates for 2021 have been revised 22.4% upward over the past 30 days. Its shares have gained 41.3% in the past three months. Currently, the company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings estimates for LPL Financial Holdings Inc. (LPLA - Free Report) have increased 4.7% for the current year over the past 30 days. The Zacks Rank #2 stock has gained 43.6% in the past three months.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.9% per year.
These 7 were selected because of their superior potential for immediate breakout.
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Washington Federal (WAFD) Announces Dutch Auction Tender Offer
Washington Federal (WAFD - Free Report) announced the commencement of a modified “Dutch auction” tender offer. The company said that it commenced a tender offer to purchase up to $290 million of its common stock in cash.
It will purchase the shares at a price not less than $26.50 per share and not greater than $31.00, less any applicable withholding taxes and without interest. The purchases will be made using the proceeds from its recent depositary shares offering.
Unless extended or terminated, the tender offer will likely expire at midnight of Mar 9, 2021.
Notably, in a modified “Dutch auction” tender offer, shareholders are allowed to indicate how many shares and at what price within the range described above do they wish to tender their shares. Then, based on the number of shares tendered and the prices quoted by the tendering shareholder, the company decides the lowest per-share price that will enable it to acquire the required number of shares.
All shares that are accepted in the tender offer are purchased at the same price, irrespective of whether they were tendered at a lower price.
In the case of Washington Federal, if the tender offer is subscribed fully, it will purchase shares between 9,354,838 and 10,943,396, or 12.3% and 14.4% of its outstanding common stock.
The directors and executive officers of the company will not tender any of their shares. In fact, any shares tendered can be withdrawn prior to the expiration of the offer.
Also, the tender offer is not contingent upon any minimum number of shares being tendered.
The “Offer to Purchase” and the “Letter of Transmittal” that the company files with the SEC will contain important information about the terms and conditions of the tender offer and these must be followed by shareholders.
Goldman Sachs & Co. LLC, a unit of Goldman Sachs (GS - Free Report) , is acting as the dealer manager for the tender offer.
Per Washington Federal’s board of directors, such a tender offer is an efficient way to provide all shareholders with the opportunity to tender all or a portion of their shares.
Our Take
Supported by a solid balance sheet position, Washington Federal has been continuously enhancing shareholder value through efficient capital deployment activities. Since fiscal 2011, the company has been increasing quarterly dividend on a regular basis, with the latest hike announced in January 2020.
It also has an efficient share-repurchase plan in place. While buybacks were suspended amid the pandemic, the company is expected to be able to sustain capital deployments in the future on the back of its earnings strength.
Over the past six months, shares of Washington Federal have gained 17% compared with the 38.4% growth recorded by the industry it belongs to.
Currently, the company carries a Zacks Rank #2 (Buy).
A couple of other top-ranked stocks from the finance space are mentioned below.
Interactive Brokers Group, Inc.’s (IBKR - Free Report) earnings estimates for 2021 have been revised 22.4% upward over the past 30 days. Its shares have gained 41.3% in the past three months. Currently, the company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings estimates for LPL Financial Holdings Inc. (LPLA - Free Report) have increased 4.7% for the current year over the past 30 days. The Zacks Rank #2 stock has gained 43.6% in the past three months.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.9% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>