Q: Tendering shares for the buyback offered seems like a no-brainer since the price offered significantly exceeds the market price. Am I missing something here?
5i Research Answer:
AND is offering to buy 2M shares at $45 each, vs current price $37.83. However, there are 19.5M shares outstanding, so not all shares tendered will be bought. There will be a pro rata allocation, and thus while it is somewhat attractive, the market is assuming only about 10% will be bought by the company, which explains the price discount.