Franchise Group (FRG) has announced a reopening (further share sales of a previous issue) of the 7.50% cumulative, qualified perpetual preferred shares. NOTE–dividends are only qualified if the company is profitable–otherwise they are return of capital.
The issue trades under FRGAP and had recently traded in the $26/share area. Today the issue is trading at $25.25.
The prospectus on the reopening can be seen here.
EarlyBird mentioned this earlier today.
6 thoughts on “Franchise Group Reopens Preferred Issue”
Franchise Group, Inc. Prices $75 Million Offering of Series A Cumulative Perpetual Preferred Stock at an offering price of $25.20 per share
Sorry, haven’t researched this one but will try to look into it soon. If we are looking for a little “spice” of higher yielding and junkier preferreds to augment safer core holdings, how do people feel about the risk/reward of this issue? Has anyone really dug into it?
The Company is growing and changing faster than the SEC filings can explain. How do all these acquisitions work together? For example, SGA for the first nine months in 2020 was about six times the amount of 2019. How is all that new overhead going to be managed? Are the businesses sound or just what was available to gain size? Note that while net income for the nine months jumped, there was substantial dilution in eps. However, I do suspect that a big stimulus package and resolving covid would greatly help the acquired businesses.
I own junky preferreds that have less risk and fewer unknowns that pay as much or more than 7.5%. It would take a heck of a discount to par to tempt me.
Thanks, that’s a great post. “Less risk and fewer unknowns that pay as much or more” is a perfect one liner assessment. Still when the deal re-opens maybe we will see a bit of a sell-off as underwriters dump their shares that may warrant reconsideration.
The symbol is FRGAP, not FRG-A. At least, that’s what it is at E*Trade.
mbg–corrected–thanks–yes that is what I have on this site as well—guess I need to look closer.