Bandag buys back stock for $40 million
Bandag Inc. is exercising its right to purchase 1,114,746 shares of Bandag’s Class B Common Stock and 418,371 shares of its Class A Common Stock from Lucille Carver, widow of the founder of Bandag.
The total purchase price is $40,183,636.
With the sale, Mrs. Carver will have no further ownership interest in Bandag. She was a Bandag director from 1957 until May 14, 2002.
She is the mother of Martin Carver, Bandag's chairman, CEO and president, and Roy Carver Jr., both of whom are directors of Bandag.
The Class B Common Stock and Class A Common Stock shares will be purchased today for $27.04 and $24.00 a share, respectively.
The share prices offered are equal to the composite closing prices of Bandag’s Common Stock (in the case of the Class B Common Stock) and Class A Common Stock on the New York Stock Exchange at the close of business on June 18, 2002, less a discount of 3.5% per share in the case of the Class B Common Stock and 4% per share for the Class A Common Stock.
A three-member committee composed of independent directors approved the proposed per share purchase prices and recommended the prices to the board of directors. The board, with Martin and Roy Carver abstaining, unanimously approved the purchase.
With the sale, the voting power of the Carver family, composed primarily of the lineal descendants of late founder Roy Carver Sr. and Lucille Carver, will be reduced from approximately 78% to approximately 64%.
Martin and Roy Jr. will have sole voting power of approximately 28% and 22%, respectively, and share voting power over 14% of Bandag’s total voting power.
The shares to be purchased are to be deducted from the 2,544,825 shares remaining from previous stock purchase authorizations by the board of directors, the most recent occurring on May 2, 2000. Bandag's management is authorized, from time to time, to make open market and privately negotiated purchases of Bandag’s Common Stock and Class A Common Stock.