Asta Funding Inc. started a tender offer to buy up to 5,314,009 of its common shares for $10.35 per share in cash.
The tender offer will expire Feb. 15 at 5 p.m. ET, unless extended.
Asta Funding launched the tender offer pursuant to an agreement with Mangrove Partners and its affiliates, a major shareholder group that beneficially owns about 33% of Asta Funding's stock.
Mangrove Partners and its affiliates will tender their 4,005,701 shares, and Asta Funding will accept shares beyond the tender offer's limit on a pro rata basis. Gary Stern, chairman, president and CEO of Asta Funding, agreed to buy from Mangrove Partners and its affiliates any shares that his company did not buy in the tender offer. Asta Funding's directors and executive officers, including Stern and his affiliates, will not tender any shares.
Asta Funding will use a portion of its cash and cash equivalents on hand and securities available for sale to fund the purchase of shares in the tender offer.
Innisfree M&A Inc. is serving as information agent for the tender offer.
In November 2016, Asta Funding and Mangrove Partners terminated a confidentiality agreement that prohibited the parties from engaging in any M&A activity or "extraordinary transactions" with respect to Asta Funding.
Mangrove Partners previously started an unsolicited tender offer for Asta Funding shares and sought to engage in discussions with the specialty lender's management and board. The unsolicited tender offer was ultimately terminated after Asta Funding urged its shareholders to reject the offer before starting its own modified Dutch auction tender offer.