LifeVantage (LFVN -0.79%) is going the Dutch auction route for its current share repurchase effort. The company today launched the auction, in which it is soliciting offers to buy back up to $40 million of its common stock. The auction will close at 5 p.m. Eastern time on October 25, unless it decides to extend it.
In a Dutch auction buyback, participating shareholders specify how many shares they would like to offer and at what price, within a certain range specified by the tendering party. In the case of this tender, the range is $2.45-$2.80, and in LifeVantage's words "based on the number of shares tendered and the prices specified by the tendering shareholders, the Company will determine the lowest price per share within the range that will enable the Company to purchase $40,000,000 of its common stock, or a lesser amount if the offer is not fully subscribed."
The tender is conditional upon the company being able to enter into a new credit facility to fund the buybacks, as well as what it terms "other customary conditions" described in the auction's documentation.
At the moment, LifeVantage has more than 117.6 million shares outstanding, and its stock most recently closed at $2.39 per share.