Credit Acceptance Announces Tender Offer
SOUTHFIELD, Mich., Feb. 9, 2011 (GLOBE NEWSWIRE) -- Credit Acceptance Corporation (Nasdaq:CACC) (referred to as the "Company", "we", "our", or "us") announced today that we have commenced a tender offer to purchase up to 1,904,761 shares of our outstanding common stock at a price of $65.625 per share.
We anticipate that we will obtain all of the funds necessary to purchase shares tendered in the tender offer, and to pay related fees and expenses, through a combination of the proceeds of a new debt financing (the "Debt Financing") and by borrowing under our $170.0 million revolving secured line of credit facility. The tender offer is subject to the consummation by us of the Debt Financing on terms satisfactory to us.
The primary purpose of this proposed transaction is to distribute excess capital to shareholders. We believe distributing capital to shareholders is appropriate at this time for the following reasons:
- Since the beginning of 2009, we have generated approximately $315.0 million in profits.
- In 2010, the Company completed several longer-term debt financings which have significantly reduced the probability that the Company would need to curtail its loan originations if debt markets become inaccessible.
- As of December 31, 2010, we had approximately $340.0 million in unused and available capacity on our revolving lines of credit. Upon completion of the tender offer and the related Debt Financing, we believe we will have sufficient capital to fund new loan originations.
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