Encore Capital Sale Off the Table; Share Repurchase Initiated

Encore Capital Group announced in its quarterly earnings release Wednesday that it has concluded their “review of strategic alternatives,” and determined that the company’s shareholders will be best served by continuing business as planned.

Encore announced in June of last year that it was planning to explore possible alternatives to moving ahead with its business plan.  Options on the table at the time included going private or selling the firm outright.

Commenting on the decision to stand pat, Richard A. Mandell, Chairman of the Board of Directors of the Company and a member of the Special Committee said, "While the Board believes that it was in the best interest of stockholders for the Company to consider strategic alternatives, the Board has concluded that, in light of the alternatives available, including non-binding indications of value received for the sale of the Company, the better alternative at this time is for management to focus on executing the Company's business plan."

Mark Russell, director at ARM industry advisor Kaulkin Ginsberg Company, said of the announcement, “This announcement is not surprising as the market has clearly indicated that it is not willing to pay a high enough premium above the value of the assets under management in order to make a transaction occur.”  Russell added, “The introduction of the securities repurchase program is a good move, as it shows that the Board is confident in Encore’s management team and its ability to improve the company’s future performance.”

Encore also said that its Board of Directors has authorized a securities repurchase program under which the Company may buy back up to $50 million of a combination of its common stock and convertible senior notes.