Nationstar Mortgage (NSM) – Odd Lot Tender Offer – minimal upside currently

Current Price – $9.05

Offer Price – $8.2 - $9.4

Upside – potentially 3% or $35 (if the upper pricing limit is used)

Expiration date –  11 March 2016

No proration for odd lot holders

Some thoughts: With the recent market volatility there is a good chance that better buying opportunities will appear before expiry of the offer

SEC Filling

 

Summary:

Nationstar Mortgage Holdings Inc., a Delaware corporation, is offering to purchase shares of its common stock, par value $0.01 per share , for an aggregate cash purchase price of up to $100,000,000 pursuant to (i) auction tenders at prices specified by the tendering stockholders of not greater than $9.40 per Share nor less than $8.20 per Share.

At the maximum purchase price of $9.40 per Share, subject to any increase we may later make (subject to applicable law), we could purchase up to 10,638,297 Shares if the Offer is fully subscribed, which would represent approximately 10.3% of our issued and outstanding Shares as of February 9, 2016. At the minimum purchase price of $8.20 per Share, subject to any increase we may later make (subject to applicable law), we could purchase up to 12,195,121 Shares if the Offer is fully subscribed, which would represent approximately 11.9% of our issued and outstanding Shares as of February 9, 2016. 

 

No proration for odd lot holders

If you own fewer than 100 Shares in the aggregate, you properly tender and do not withdraw all of these Shares at or below the Purchase Price prior to the Expiration Date, we will purchase all of your Shares without subjecting them to proration. 

 

Source and amount of funds

As of February 10, 2016, we had approximately $300 million in cash and cash equivalents. We will fund any purchase of Shares pursuant to the Offer, including the related fees and expenses, from cash and cash equivalents on hand. The Offer is not conditioned upon the receipt of financing. Assuming the Offer is fully subscribed, and subject to any increase we later make, we expect the aggregate purchase price for the Shares, together with all related fees and expenses, to be approximately $101,250,000.