Reckon just announced it had signed a selective buy-back agreement for Intuit's 11.5 per cent holding at a 13 per cent discount to current levels ($2.13). We take a quick look at what this means.
The funding of $27.4m will not be a problem because Reckon's balance sheet is strong, with net debt of only about $15m.
We reguard it as a minor positive because the overhang has been removed and it’s a sign of management’s confidence, because it already has a sizeable position.
The company was already planning to buy back about 8 per cent of the 10 buy back announced last year. So, it means they get this stock on the cheap.
It is a minor positive because there are much bigger issues for the company than this, ie the take up of its new products.