Harmonic Announces $100 Million Stock Buyback, New Chairman

Posted by Joe Zaller
Apr 25 2013

Harmonic announced that it will buy back up to $100m of its shares a through a modified “Dutch Auction” tender at a price per share not less than $5.75 and not greater than $6.25. The tender offer is expected to commence on April 26, 2013, and to expire on May 24, 2013, unless extended. The number of shares proposed to be purchased in the tender offer represents approximately 14.1% of Harmonic’s currently outstanding common stock.

On the terms and subject to the conditions of the tender offer, Harmonic’s stockholders will have the opportunity to tender some or all of their shares at a price within the $5.75 to $6.25 per share range. Based on the number of shares tendered and the prices specified by the tendering stockholders, Harmonic will determine the lowest per-share price within the range that will enable it to purchase 16 million shares, or such lesser number of shares that are tendered and not withdrawn. All shares accepted in the tender offer will be purchased at the same price per share even if a stockholder tendered at a lower price. If stockholders tender more than 16 million shares at or below the purchase price per share, Harmonic will purchase the shares tendered at or below the determined purchase price by those stockholders, subject to proration and certain other factors.

“The tender offer is the result of the Board`s continued evaluation of our capital structure, the appropriate level of cash to run and grow the business, and our free cash flow and balance sheet,” said Patrick Harshman, Harmonic`s President and Chief Executive Officer. “With these resources, we have multiple opportunities to drive shareholder value, including investments in strategic growth initiatives and stock repurchases. As the Board continues to evaluate our capital structure and explore ways to effectively use our cash balances to drive shareholder value – and having solicited the input of several major shareholders – the Board concluded that a cash tender offer at this time would be an appropriate mechanism to return capital to shareholders that seek liquidity under current market conditions. At the same time, shareholders who do not participate in the tender offer will share in a higher portion of Harmonic`s future potential.”

Harmonic also announced that Patrick Gallagher was appointed Chairman of the Board of Directors. Gallagher succeeds Lewis Solomon, who will retire from the Board prior to the Company`s 2013 Annual Meeting of Stockholders.

“On behalf of the entire Board, I would like to thank Lew Solomon for his ten years of service to Harmonic and its shareholders, including the last five as Chairman,” said Gallagher. “He joined the Board at a time when Harmonic had just begun to expand beyond its roots in broadcast hardware and helped guide the Company in its evolution as a technology innovation leader. I look forward to working with our Board and management team as we continue to pursue the significant growth opportunities that we have before us today to create long-term value for our shareholders.”

The company said that the actions were designed to deliver value to its shareholders.

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Related Content:

Press Release: Harmonic Announces Intent to Repurchase Up to $100 Million of Its Common Stock Through A Modified “Dutch Auction” Tender Offer

Press Release: Harmonic Announces Capital Allocation and Board Changes

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