Monday 14th November 2011
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Tenon, the NZX-listed company that sells wood mouldings in the US, is offering to buy back shares from investors with a small stake in the company in a bid to cut administrative costs.
The company wants to buy as many as 1.25 million shares at 65 cents apiece from the 6,000 shareholders with 10,000 shares of fewer, spending as much as $813,000. The offer comes after the stock shed 46 percent of its value this year, with a sharp drop in August when it reported an annual US$2 million loss for the year through June.
The current price values Tenon at $43.5 million, though its enterprise value is $82.1 million, according to Reuters data. The shares are rated a ‘hold’ by the one analyst following the stock.
The soft earnings result came amid a tough trading environment as a moribund US economy weighed on consumer demand for housing. Still, the board is picking positive earnings before interest, depreciation, tax and amortisation for the 2012 year as the company recognises gains from restructuring.
Last month, Tenon parent Rubicon came under pressure from long-standing investor Sandell Asset Management to sell its stake in Tenon.
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