BlueLinx announces share repurchase program
BlueLinx Holdings has announced its intention to repurchase up to $10 million of its common shares on the open market, using its cash reserves, over the next two years. The share repurchase program was approved by BlueLinx’s board of directors as part of an effort to leverage the company’s strong cash position and strengthen the company’s overall financial position, according to a press release.
“We believe the company’s shares, particularly in light of recent market developments, are undervalued and represent an attractive investment opportunity,” said George Judd, BlueLinx president and CEO.
The company’s major shareholder, Cerberus ABP Investor LLC, has indicated that it does not intend to sell shares to BlueLinx as part of the repurchase program, the announcement said.
Headquartered in Atlanta, BlueLinx distributes building products through a network of more than 70 warehouses. It is listed on the New York Stock Exchange under the symbol BXC. The closing price for BlueLinx on Dec. 30 was $2.03 a share.
Hines Horticulture purchased by creditor
Black Diamond Capital Management, a private equity and hedge fund based in Illinois, has become the new owner of Hines Horticulture. The commercial grower was purchased by its largest unsecured creditor in a deal approved by a federal bankruptcy court in Delaware.
Hines filed a voluntary petition for Chapter 11 bankruptcy protection on Aug. 20, citing a rise in production costs, pricing pressure from large customers and weather-related factors. The Irvine, Calif.-based company is the industry’s largest producer of ornamental shrubs and container-grown plants in the country, operating seven nurseries in four states. It sells to more than 6,670 retail outlets. Its customers included Home Depot, Lowe’s, Wal-Mart and many independent garden centers.
Black Diamond Capital Management, which was Hines’ largest unsecured creditor, held a majority of its $175 million in senior subordinated notes. In earlier court papers, the fund offered $58 million in cash for the company.
Consumer confidence shaken
The Conference Board’s Consumer Confidence Index in December fell to 38.0, down from 44.7 in November. The new figure is the lowest since 1967, when the business group began tracking the index. A reading of 100 represents 1985 levels of confidence.
Also on the decline were the Present Situation Index, down from 42.3 last month to 29.4 in December; and the Expectations Index fell from 46.2 to 43.8.
“The further erosion of the Consumer Confidence Index reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008,” said Lynn Franco, director of the Conference Board Consumer Research Center. “The Present Situation Index is now close to levels last seen in the months following the 1990 to 1991 recession, but is not as low as levels reached during the 1981 to 1982 recession. Declines in the Expectations Index appear to be moderating, but this index continues to hover at historical lows. Both sub-indexes bear careful watching over the next several months to see if they are starting to show signs of approaching a bottom. In the meantime, however, the overall economic outlook remains quite dismal for the first half of 2009, and only a modest recovery is expected in the second half.”
Consumers’ short-term outlook was only moderately more pessimistic. Those anticipating business conditions to worsen over the next six months increased to 32.8 percent from 28.3 percent, while those expecting conditions to improve rose to 13.4 percent from 11.5 percent.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for the Conference Board by TNS.