Collectors Universe Jumps on New, Higher Acquisition Offer

An investment group raised its proposed purchase price for Collectors Universe to $92 per share Wednesday.
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Memorabilia authenticator Collectors Universe  (CLCT) - Get Report jumped nearly 20% Wednesday after the company announced that the investment group led by collector Nat Turner, D1 Partners and Cohen Private Ventures has increased its acquisition offer to $92 per share in cash.

The new offer represents an 18% premium over the company's closing price on Tuesday, and a 32% premium over its share price on Nov. 25, the last day of trading before Collectors Universe announced the original offer. 

“This enhanced, ‘best and final’ offer recognizes the strong momentum in our business and provides certainty of value in an uncertain economic environment," said Collectors Universe board chairman, A.J. Moyer. "While the Board has a high degree of confidence in management’s plan, it also believes that there is a significant risk that the Company’s recent growth rate will decline over time."

The announcement came in the same release as the company's preliminary second quarter results. 

The Newport Beach, Calif.-based company expects revenues for the quarter ended Dec. 31 of $35.4 million, with a gross margin of 64% and operating income of approximately $10 million. 

The company says these results are subject to change before they are finalized early in Feb.  

Collectors says the second quarter performance is attributable to an increase in "top-tier services" performed by its PSA division, which provides trading card grading and professional sports memorabilia authentication.  

Those smaller batch, rapid turnaround services have resulted in an average selling price (ASP) that is 35% higher than the prior quarter, and approximately 65% higher than the average ASP in its backlog, CEO Joseph Orlando said. 

Collectors Universe was up 17.84% to $91.68 Wednesday afternoon.