After Auction, P.A.M. Stays in Buyback Mode

by Marty Cook  on Monday, Jan. 13, 2014 12:00 am  

West said the tender offers were made to a third party so P.A.M. doesn’t know exactly from whom it bought the shares or which holders made tender offers that weren’t accepted. West said he assumed that the major sellers were the company’s institutional holders that hold a large number of shares in mutual funds or some other portfolio.

P.A.M.’s largest shareholder, the Moroun family, was ineligible to submit tenders because Matthew T. Moroun is the company’s chairman of the board. The Morouns control more than 4.7 million shares of P.A.M. stock and will see their ownership percentage increase from 54.5 percent to 59 percent after the buyback.

West said the Morouns once held more than 70 percent of P.A.M. stock before the company put about 3.5 million shares up for a public offering in 2002. P.A.M. used the proceeds of that sale to pay off debt and has been buying back shares since.

West said P.A.M. has bought back 2.7 million shares since May 2005 and the auction pushes that total to about 3.4 million. The company’s board of directors has already given approval for the repurchase of another 225,000 shares, and West said P.A.M. has plenty of capital to follow through if the opportunity arises.

“The stock was actually increasing before we put it out there that we were doing a tender offer,” West said. “The market saw us as undervalued just based on our results throughout the year. It increasingly made it more difficult for us to buy.”



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