Drew Industries Inc., parent of RV industry supplier firms Kinro and Lippert, announced it is willing pay $8 a share, at some unspecified point in the future, for up to 500,000 shares of its own stock.
The buy-back would occur in the form of a tender offer, which means shareholders would have to make their own decision about selling their stock back to the company at the $8 a share price.
Drew stock closed at $7.0625 a share in American Stock Exchange trading Friday, the last day of trading before the tender offer was announced.
Drew stock closed at $7.6875 a share on Tuesday.
The Drew Board of Directors is not advising shareholders whether to tender their shares.
If more than 500,000 shares are offered, then the shares would be purchased on a pro rata basis from each shareholder who properly tenders their shares. However, the company will buy back all the shares that are offered by shareholders owning less than 100 shares.
The 500,000 shares represent 4.5% of Drew’s outstanding common stock.
The purpose of the stock buy-back would be to increase shareholder value, according to the company.