Utah Medical Products Inc. (NASDAQ: UTMD) announced a tender offer to repurchase up to 650,000 of its shares at $75 per share, a move that would remove roughly 20% of its outstanding stock.
The $75 offer price sits just below the stock's highest intraday level in more than two years, according to Investing.com data, and carries a 17% premium over the average daily closing price over the past 12 months and a 21% premium over the two-year average.
Utah Medical Products, based in Salt Lake City, develops, manufactures and markets disposable and reusable specialty medical devices focused on women's and neonatal health care. Chairman and CEO Kevin Cornwell said the company has excess cash to fund the buyback.
"UTMD remains a healthy business with excess cash capable of providing the funds needed to repurchase shares," Cornwell said in a statement. "The company wishes to make an investment that by anti-dilution will substantially enhance the value of shares held by its continuing stockholders confident in UTMD's future, by giving investors who are tired of the low share price an opportunity to sell shares at a premium over the current price."
The board approved the tender offer but declined to recommend that shareholders accept it. The offer is not conditioned on a minimum number of shares being tendered.
If the offer is oversubscribed, the company said it will first honor requests from stockholders owning fewer than 100 shares who tender all their holdings, then allocate any remaining shares on a pro rata basis.
The tender offer commenced on a Monday and is scheduled to expire 15 business days later, with an october 7 deadline for stockholders to submit shares. The company reserved the right to extend the offer period or purchase additional shares beyond the initial 650,000 target.
