News SeaWorld Will Buy Back $150M in Shares

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Level 65 Rumor Bear
Aug 23, 2017
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Found it

SEAS is buying shares thus boosting the market value of I read that correctly. I know there are more market literate users on this forum so maybe one of them can translate this article.
 
Sep 24, 2018
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Found it

SEAS is buying shares thus boosting the market value of I read that correctly. I know there are more market literate users on this forum so maybe one of them can translate this article.
Kind of. They entered into two agreements. One involved them buying shares back from PAG and the other involved another investment firm increasing it's share holdings by buying more shares from PAG. Both actions together led to increased trading this morning which raised the share price.

If you do the math on the price SEAS paid on the shares they paid approximately $26.79 per share. That's about 50¢ less than what they were trading at when the markets closed on Friday. So this isn't SEAS artificially inflating stock by overpaying.

Basically this is the market reacting to SEAS and Hill Path capital buying shares. Generally I view it as a good thing when a company wants to increase it's investment.
 
Mar 16, 2016
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Kind of. They entered into two agreements. One involved them buying shares back from PAG and the other involved another investment firm increasing it's share holdings by buying more shares from PAG. Both actions together led to increased trading this morning which raised the share price.

If you do the math on the price SEAS paid on the shares they paid approximately $26.79 per share. That's about 50¢ less than what they were trading at when the markets closed on Friday. So this isn't SEAS artificially inflating stock by overpaying.

Basically this is the market reacting to SEAS and Hill Path capital buying shares. Generally I view it as a good thing when a company wants to increase it's investment.
Very much agreed on many points. I am a share holder in SEAS (To give an idea, I have enough to get invited to the yearly shareholder outing like Disney Apple and IBM, but not enough to actually matter in anything); so what my investment banker told me about this transaction and it's meaning for SEAS. Them and Hill Path buying shares off PAG took the shares that were devalued by an unstable company who pulled down the value (because of the uncertainty of what could happen with it), and gave control of it to much more stable companies with a bigger hand in the plan (meaning a lowered chance of those shares being sold off making the remaining shares more valuable).
 

Zimmy

Nessie wants you to look into yourself
Sep 28, 2013
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Is this the first time they have bought back, shares. I seem to recall them doing it before. interesting... very interesting... If they buy more it will be more interesting still...
@Lolers do you smell leverage?
 
Feb 3, 2019
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Is this the first time they have bought back, shares. I seem to recall them doing it before. interesting... very interesting... If they buy more it will be more interesting still...
@Lolers do you smell leverage?
This is not the first time they have bought back shares... They have long had a buyback program in place. The SEC rules say that they have to announce their buybacks and so this is that announcement.

The thing I need to research is if this is a part of the existing buyback program or in addition to it.

Probably the bigger news wasn't quoted in @Zimmy's article: that hillpath will increase their stake in SeaWorld by a huge margin:

 
Feb 3, 2019
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I think these are the shares that zonghong had to surrender.

Those shares were worth around 500 million.

SeaWorld is buying back 150m worth and hillpath is buying 353m.
 
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Zimmy

Nessie wants you to look into yourself
Sep 28, 2013
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I appreciate the plug but @GrandpaD found the article. I am curious if they trying to get a big enough % to stop a leverage buy out or maybe even start one. Taking the company private could have its uses... I wonder if KKR or Amex will get involved. :)
 

GrandpaD

Grumpy Ol' Man
Aug 3, 2017
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Feb 3, 2019
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Buying back shares is much different than taking the company private.

In the case of buy back the shares are removed entirely from the pool.

In the case of taking a company private the company has to buy all of the shares at once - effectively wiping the stock from the exchange.
 

Zimmy

Nessie wants you to look into yourself
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Yes, I am aware of that, I was speculating. I actually suspect they are trying to gain a significant % of the stock to prevent a hostile buy out and to calm shareholder fears. Their debt load is still unhealthy.

My comments about the leverage buy out were an aparently bad, refrence to the RJR-Nabisco disaster. (hence the reference to KKR and Amex).
 
Feb 3, 2019
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At this point Hillpath owns 34.5% of SeaWorld.. they could relatively easily take control by acquiring just 15.5% +1 more shares.

To put this another way:

At this point, Hillpath owns a $1billion investment in SeaWorld. With $400 million more, they would own a controlling stake in seas.
 
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GrandpaD

Grumpy Ol' Man
Aug 3, 2017
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At this point Hillpath owns like 36% of SeaWorld.. they could relatively easily take control by acquiring just 14% +1 more shares.
Are you even reading the articles? Both say the same thing- ”increasing its equity stake in the Company to approximately 34.5%."
 
Feb 3, 2019
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Yes, I am aware of that, I was speculating. I actually suspect they are trying to gain a significant % of the stock to prevent a hostile buy out and to calm shareholder fears. Their debt load is still unhealthy.

My comments about the leverage buy out were an aparently bad, refrence to the RJR-Nabisco disaster. (hence the reference to KKR and Amex).
SeaWorld doesn't own any of it's own shares though.

In protecting from a buyout, members of the board would be buying shares. Not SEAS itself.

In a buy back, the shares cease to exist and are removed from the pool completely.

Executives and board members collectively own around 24-25% of the company.. so they are, in no way, protected from a takeover.
 
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Feb 3, 2019
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@GrandpaD yes of course .

And I didn't mean to say that your article didn't mention the Hillpath purchase.

I just think that the Hillpath purchase is just as big (or bigger) a headline than the buyback.

Either way, they've cleared up any concerns investors may have had with a random creditor acquiring a large stake in SeaWorld through zhonghongs default.
 

Zimmy

Nessie wants you to look into yourself
Sep 28, 2013
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It is also possible that behind closed doors Hillpath and Seas Board have a working agreement. If they are aligned together they could be blocking. Unfortunetly we will never know since we are not in Orlando. Having said all that, I enjoy the drama of leverage buy out or hostile takeover. So much drama!
 
Feb 3, 2019
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Here are my final thoughts.

SeaWorld stock closed at $31.77 today for a market cap of $2.675 billion. By my math, this means there are 84.2 million shares in circulation.

SeaWorld buying back 5.6 million shares represents 6.6% of the shares in circulation.

The power of the buyback announcement alone should have powered a stock price gain of at least 6.6% .. but the stock gained 16.5% today.

I think the reason why it gained so much was due to the additional news of Hillpath holding increase.

One may note that when the quarterly results came out, despite having good results, the stock went down on the uncertainty of the zhonghong default.

So, my thoughts are now this event resolves the zhonghong questions; shows corporate strength, and that their largest investor believes in them.
 
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