Here's the 8K filing about the recent buyout of Patriot ethanol plant-- REX will likely get $49M out of the deal given their partial ownership.
Mgmt has repurchased shares with a lot of their cash since last Fall when the s/price tanked during the oilprice war and energy-sector slumped. Unless there is some other better use of the money, there's no reason that REX couldn't use these funds to judiciously buy more shares of their own company (they would need the BOD to raise the limit of re-purchasable shares). At present s/price, with $49M they could buy back over 760,000 shares, or more than 1/10th their outstanding shares, which would of course increase their quarterly EPS on all subsequent earnings.
I'm not sure how all the math works out.... Patriot was supplying 12.8% of their production, according to the basic production table at their website, but i don't know if the math worked out to Patriot providing the same percentage of EPS to REX's bottom line. It would be great if REX could buy back an amount of their own shares that equals or surpasses the percentage of EPS that Patriot was providing, but i don't know how to figure that....
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Current Report Filing (8-k)
Date : 05/11/2015 @ 9:30AM
Source : Edgar (US Regulatory)
Stock : Rex American Resources Corp (REX)
Quote : 64.4 1.03 (1.63%) @ 4:03PM
Current Report Filing (8-k)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 11, 2015
REX AMERICAN RESOURCES CORPORATION
[...]
Item 8.01. Other Events
On April 23, 2015, the Board of Directors of Patriot Holdings, LLC (“Patriot”) approved a merger agreement with a subsidiary of CHS Inc. (“CHS”) that would result in CHS acquiring 100% of the ownership interest in Patriot. REX American Resources Corporation owns a 26.6% interest in Patriot. The merger agreement is subject to approval by the members of Patriot and normal and customary conditions to closing.
The total merger consideration is $196 million in cash, subject to certain adjustments relating to Patriot’s net working capital (targeted at $6.4 million) and cash and cash equivalents at the closing of the merger and certain escrow holdbacks and less the amounts of certain transaction expenses, outstanding indebtedness of Patriot and the estimated costs of completion of certain capital expenditure projects, if incomplete at closing.
REX expects to receive a cash payment of approximately $44 million at the closing. Assuming the full payment of the escrow holdbacks, REX would receive an additional amount of approximately $5 million. The closing of the merger is expected to occur on or about June 1, 2015 subject to the satisfaction or waiver of the closing conditions.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
REX AMERICAN RESOURCES CORPORATION
Date: May 11, 2015 By: /s/ DOUGLAS L. BRUGGEMAN
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Name: Douglas L. Bruggeman
Title: Vice President - Finance,
Chief Financial Officer
and Treasurer
