A Chicago thrift under fire from activist investors said it plans to repurchase 20% of its outstanding shares in an effort to boost its weak stock price.
PS Financial Inc., a $122 million-asset thrift company, said it plans by the end of March to buy up to 333,858 shares of its common stock in a "dutch auction." In this type of transaction, investors offer shares for sale with a minimum price attached. Then the company determines how much it must pay to acquire the specified number of shares and pays all stockholders tendering at that price or lower the same price.
PS Financial plans to pay $12 to $14.50 per share. Its shares were trading at $12.50 Friday morning, 8.7% above its $11.50 per share book value.
Kimberly P. Rooney, PS Financial's president and chief executive officer, said the company's decision for a dutch auction was made without regard to a proxy battle begun little more than a week ago by the Chicago investment group Jackson Boulevard Partners LP. The firm has been spearheading an effort to force the thrift to sell itself and has nominated two directors for board seats.
"We were talking about this for a long time," Ms. Rooney said. "This is a good move for us and our shareholders regardless of whatever else is occurring outside the company."
But Christopher R. Raffo, senior vice president of the Chicago investment firm Podesta & Co., called the thrift's move "a little sleazy." Mr. Raffo's firm also has urged a sale, and he said the dutch auction might take investors out of the stock who otherwise would support Jackson Boulevard's nominees.
"This management is doing everything they can to further entrench themselves," Mr. Raffo said.