The owner of the TV One and Cleo cable TV networks, and the Radio One and Reach Media audio content creation and distribution arms, now has the freedom to engage in some significant stock buybacks — should it elect to do so over the next two years.
Urban One‘s board of directors on Monday (3/7) authorized and approved a share repurchase program for up to $25 million of the currently outstanding shares of the company’s Class A and/or Class D common stock over a period of 24 months.
Under the stock repurchase program, the company intends to repurchase shares through open market purchases, privately-negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws.
The ability to buy back shares could help Urban One as it seeks to push the value of its publicly traded shares forward. With minutes remaining in Monday’s trading session, UONE was off 6.2% to $5.27. However, that’s better than the $4.19 closing price seen on January 24 for Urban One shares, but slightly lower than where UONE stood one year ago.
The stock buyback authorization isn’t the only decision the Urban One board arrived at on March 7: it also approved a repurchase program for up to $50 million of the company’s outstanding 7.375% Senior Secured Notes due 2028.
Then, there’s the board’s authorization giving Urban One permission to repurchase shares and/or bonds at times when it might otherwise be prevented from doing so due to self-imposed trading blackout periods or pursuant to insider trading laws.
This sees Urban One enter into written trading plans under Rule 10b5-1 of the Exchange Act.
Under any Rule 10b5-1 trading plan, a company’s third-party broker, subject to Securities and Exchange Commission regulations regarding certain price, market, volume and timing constraints, would have authority to purchase the company’s common stock and/or bonds in accordance with the terms of the plan.
Urban One may from time to time enter into Rule 10b5-1 trading plans to facilitate the repurchase of its common stock or bonds pursuant to its repurchase programs.
The company’s share repurchase programs do not obligate it to acquire any specific number of shares or bonds. Thus, Urban One could end up never engaging in a transaction.
That said, it is highly unlikely that a stock buyback will not occur within the next several months.
The approval of a stock buyback program comes after a request from Urban One CFO Peter D. Thompson, who asked the board to authorize one in connection with the company’s capital allocation strategy.
Thompson noted this on the company’s Q4 2021 earnings call but did not provide further details.
A FURTHER GAMBLE IN RICHMOND
Also during the course of Urban One’s Q4 2021 earnings call, CEO Alfred C. Liggins III confirmed that the company he leads has continued to pursue the ONE Casino + Resort project in Richmond. This sees Liggins’ efforts to get a second referendum in the City of Richmond — something that has ignited opposition within the Virginia state legislature. In fact, some in the statehouse are looking to block or delay a second referendum.
As the Virginia General Assembly weighs in on the future of the project, voted down narrowly by city voters in November 2021, Pacific Peninsula Entertainment — Urban One’s partner in the project — has agreed to sell its partnership with Urban One in the ONE Casino + Resort project to Churchill Downs Inc.
That’s the gaming operator that also owns the Kentucky Derby.
