FCharlie Posted March 15, 2016 Share Posted March 15, 2016 Looks to me like the board and management are doing a lot of what Engaged Capital wants them to do. I too noticed they now have a preference for dividends and opportunistic debt repurchases. I think that management and the board are showing how easily they can be told what to do. After all, if your stock is this low, why not buy back 10-20% of the company? They could use their revolver to buy in the debt at 75 cents on the dollar. This would extinguish debt without actually spending free cash flow. Let's say the 2021 notes at 75 cents get retired with the revolver. Outerwall would realize a gain of about $65 million on this transaction. They wouldn't need to use cash from operations to do it, just the revolver. If they did this, they book a $4.00-$5.00 per share gain. Then they can buy in the 2019 notes at 85 cents on the dollar. Even if they pay 90 cents they should do this, using the revolver. In the end, you get about $11-$12 per share of free cash flow and erase $100 million of debt and double the dividend. Oh well. maybe one day I'll have $50 million to invest and I'll be able to tell a company what to do. Link to comment Share on other sites More sharing options...
JayGatsby Posted March 15, 2016 Share Posted March 15, 2016 I think that management and the board are showing how easily they can be told what to do. That's the part that bothers me. Seems like if you have a lot of confidence in the business you repurchase shares. Given the guidance they don't have a ton of confidence in the business so that would lead you toward repaying debt. Increasing the dividend doesn't maximize value in either scenario unless your only goal is a short squeeze / temporary rally. Guess the Board has egg on their face for refusing to meet with Engaged and for failing to engage with buyout offers. I can't think of a good reason not to engage with a potential suitor unless your only goal is to keep your job. Seems like that continues to be the primary motivation. Link to comment Share on other sites More sharing options...
BTShine Posted March 16, 2016 Share Posted March 16, 2016 Read Mr. Mecham's letter posted on ValueWalk and it sounds like he's staying in OUTR and supports the activists from Engaged Capital. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted March 17, 2016 Share Posted March 17, 2016 Read Mr. Mecham's letter posted on ValueWalk and it sounds like he's staying in OUTR and supports the activists from Engaged Capital. Yea...but he calls it a massive mistake and says it will still likely end up being an investment worthy of the wall of shame. Sounds like he sees more value than the current price with the activist investors, but that he probably wouldn't own it otherwise.... http://www.valuewalk.com/2016/03/arlington-value-capital-2015-annual-letter/ Link to comment Share on other sites More sharing options...
kab60 Posted March 24, 2016 Share Posted March 24, 2016 Redbox plans new streaming service: http://variety.com/2016/digital/news/redbox-digital-streaming-service-planned-1201738354/ Link to comment Share on other sites More sharing options...
rsmehta Posted March 25, 2016 Share Posted March 25, 2016 Redbox plans new streaming service: http://variety.com/2016/digital/news/redbox-digital-streaming-service-planned-1201738354/ Too little too late?? Is there anyway to create synergies between VOD and kiosks to gain an advantage(something like, 1 free DVD for 5 VOD rentals) --------------------------------------- On a separate note, I really wonder if this announcement and the one last week has more to do with desperation on terrible results to be expected in Q1 or if things have bounced back for the better. Management clearly knows how Q1 is shaping up by now, it's up to us to find subtle clues on these press releases. Link to comment Share on other sites More sharing options...
Sunrider Posted March 25, 2016 Share Posted March 25, 2016 I wouldn't say too little too late but rather a continuation of the same BS. Why are there so few managers who can look at the facts and do the right thing for shareholders if it means to run the business off for cash, not trying to build an empire. This was tried with VZ two years ago and now they are at it again? How much more money will this Board blow into the wind? I guess as long as their Board fees continue ... Disgusting. C. Link to comment Share on other sites More sharing options...
kab60 Posted March 25, 2016 Share Posted March 25, 2016 It's such a great example of why it's important with aligned interests (and why I'm looking for owner-operators (that aren't empire builders). Blucora is another terrible example of lighting other peoples money on fire while management fills its own pockets. Link to comment Share on other sites More sharing options...
rsmehta Posted April 12, 2016 Share Posted April 12, 2016 http://mobile.reuters.com/article/idUSFWN17F0KX Outerwall announces cooperation agreement with Engaged Capital LLC, agrees to add 3 independent members to the board. Jeffrey Brown,CEO and founding member of Brown Equity Partners LLC and two other members to be named by August 1st. ------------------------------------- Great news for investors. Link to comment Share on other sites More sharing options...
BTShine Posted April 12, 2016 Share Posted April 12, 2016 That is great news for investors. Thanks for posting this. Link to comment Share on other sites More sharing options...
rsmehta Posted April 28, 2016 Share Posted April 28, 2016 http://ir.outerwall.com/investors/news-and-events/financial-news/news-releases-details/2016/Outerwall-Inc-Announces-2016-First-Quarter-Results/default.aspx Highlights from the first quarter 2016 include: Delivered $108.0 million in core adjusted EBITDA from continuing operations, down $39.9 million from the first quarter of 2015, despite $72.7 million in lower revenue Produced $2.44 in core adjusted EPS from continuing operations Generated $53.8 million in free cash flow Repurchased $57.1 million in face value of 2021 and 2019 Notes for $45.3 million in cash Link to comment Share on other sites More sharing options...
actuary Posted May 12, 2016 Share Posted May 12, 2016 Wow, the bonds have rallied from mid-teens YTM to <9% YTM. Another dividend increase for 3Q? Link to comment Share on other sites More sharing options...
tooskinneejs Posted May 12, 2016 Share Posted May 12, 2016 "Delivered $108.0 million in core adjusted EBITDA from continuing operations" What does this even mean? Is this sorta like revenue before all the bad stuff? Link to comment Share on other sites More sharing options...
rkluwer Posted July 25, 2016 Share Posted July 25, 2016 Outerwall sold for 52.00 USD a stock. Never became the succeed we could have hoped for. Now apollo tries to milk the cash cow :) http://ir.outerwall.com/investors/news-and-events/financial-news/news-releases-details/2016/OUTERWALL-ENTERS-INTO-DEFINITIVE-MERGER-AGREEMENT-TO-BE-ACQUIRED-BY-CERTAIN-FUNDS-MANAGED-BY-AFFILIATES-OF-APOLLO-GLOBAL-MANAGEMENT-FOR-5200-PER-SHARE-IN-CASH/default.aspx Link to comment Share on other sites More sharing options...
JayGatsby Posted July 25, 2016 Share Posted July 25, 2016 I guess you could argue that the current price is inflated by sales expectations, but an 11% premium is classic OUTR. Link to comment Share on other sites More sharing options...
Snorky Posted July 28, 2016 Share Posted July 28, 2016 Can anyone explain to me, why the shareholders aren't asked here, if they want to take the "offer" of 52$ ?! I don't really want to give my shares to this price, what can I do ?! Link to comment Share on other sites More sharing options...
KJP Posted July 28, 2016 Share Posted July 28, 2016 Can anyone explain to me, why the shareholders aren't asked here, if they want to take the "offer" of 52$ ?! I don't really want to give my shares to this price, what can I do ?! The deal is structured as a two-step transaction under DGCL 251(h). See this article: https://www.paulhastings.com/docs/default-source/PDFs/stay-current-251h-tender-offers.pdf If you think the price is too low and more than 50% of the shares are tendered, your remedy is likely limited to appraisal. Link to comment Share on other sites More sharing options...
Snorky Posted July 29, 2016 Share Posted July 29, 2016 Thank you very much for the information and the link. I'm not a native speaker so the text is very hard to read because of its technical words. Can you explain to me the process in a few sentences? This would be very nice of you. Is it correct that from now on shareholders can offer the shares for 52$ to Apollo. If are there more than 50% are offered, the deal is closed and I get 52$, if I want or not? If there are less than 50% are offered, the company stays traded public on the stock market ?! Best regards Link to comment Share on other sites More sharing options...
actuary Posted September 1, 2016 Share Posted September 1, 2016 Wow, only 28% tendered. Looks like shareholders recognized a raw deal even though Engaged blew it out. I wonder if they will have to raise the offer or if another party will come with a superior proposal at this point. Would love to see them stay public. Link to comment Share on other sites More sharing options...
thefatbaboon Posted September 1, 2016 Share Posted September 1, 2016 How strange. Like you, was sure when I saw engaged go out that this deal was done. Hmmm Unless they could see it had no chance? And no Apollo increase and no other bidder. In which case get 52 and rebuy after? Link to comment Share on other sites More sharing options...
JayGatsby Posted September 6, 2016 Share Posted September 6, 2016 Coinstar sets meeting for 10 am EDT Thursday to launch buyout loans A Bank of America Merrill Lynch–led arranger group has scheduled a lender meeting on Thursday, Sept. 8 at 10 a.m. EDT to launch a $670 million loan package backing Apollo’s acquisition of Coinstar, sources said. The covenant-lite loan package includes a $535 million, seven-year first-lien term loan and a $135 million, eight-year second-lien term loan. Bank of America is joined by Jefferies Finance, Credit Suisse, and Barclays. Note that Apollo Global Management is acquiring Outerwall, which is the parent company of Coinstar and RedBox. A separate transaction that includes a $440 million loan package is set to launch tomorrow, with Jefferies leading that deal. Apollo is acquiring Bellevue, Wash.-based Outerwall for $1.6 billion. The company’s board has unanimously approved the Apollo offer. The purchase is expected to close in the third quarter, pending shareholder approval. — Richard Kellerhals/Kelly Thompson Link to comment Share on other sites More sharing options...
JayGatsby Posted September 27, 2016 Share Posted September 27, 2016 Says the deal closed, although funds haven't hit my account yet. Interestingly, it looks like Apollo cut off corporate and turned it into separate businesses: http://seekingalpha.com/pr/16617413-outerwall-inc-announces-completion-acquisition-certain-funds-managed-affiliates-apollo-global The firm said Outerwall's segments will be operated as three distinct businesses: Galen Smith will run Redbox as its CEO, James Gaherity will serve as CEO of Coinstar, and David Maquera will act as CEO of ecoATM.Outerwall CEO Eric Prusch is leaving the company. Link to comment Share on other sites More sharing options...
thefatbaboon Posted September 28, 2016 Share Posted September 28, 2016 Don't really get why tenders went from 28% to 69% Link to comment Share on other sites More sharing options...
JayGatsby Posted September 28, 2016 Share Posted September 28, 2016 Has this hit anyone's account yet? My account still shows the stock. Not sure what this part means: In connection with the merger, all shares not validly tendered in the tender offer (subject to certain exceptions, including shares for which appraisal rights were validly demanded and not subsequently withdrawn or lost) were cancelled and converted into the right to receive $52.00 cash per share. If I receive a right in lieu of cash shouldn't I receive instructions with how to exercise that right? Link to comment Share on other sites More sharing options...
RoadToUtopia Posted October 3, 2016 Share Posted October 3, 2016 I did not tender my shares but cash hit my IB account and shares are no longer shown...... Link to comment Share on other sites More sharing options...
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