(By Balaseshan) Meta Financial Group Inc. (NASDAQ:CASH), a unitary savings and loan holding company, said it has agreed to raise $34.2 million capital through selling about 1.56 million shares to hedge funds at $21.91 per share, a 6.8% discount to previous closing price.
The company said it would raise capital to support growth at its existing Meta Payment Systems program. The price per share was based on the volume weighted average prices of the company's common stock on the NASDAQ Stock Market over a recent 20 trading day period.
The company will invest at least 90% of the net proceeds from these issuances to further capitalize its unit MetaBank, which will qualify as tangible common equity and Tier 1 capital, in order to support expected significant growth in existing Meta Payment Systems programs, and the balance of the proceeds will be used by the company for general corporate purposes.
The company entered into nine separate purchase agreements with hedge funds, including Altamont Capital Partners, Philadelphia Financial Management of San Francisco LLC, and NetSpend Holdings Inc.
The hedge funds also includes Brookside Equity Partners LLC, JTH Holding Inc. - parent of Liberty Tax Service, Weintraub Capital Management L.P., and Harvest Capital Strategies LLC.
For the approval of proposed private placement transactions, a special meeting of the company's stockholders is currently scheduled for late September 2012.
In addition to stockholder approval, the closings of the proposed private placement transactions are subject to certain customary conditions, including the non-occurrence of a material adverse effect as to the company.
Assuming the satisfaction of the closing conditions, the company anticipates that the proposed private placement transactions will close as soon as practicable following stockholder approval.
CASH closed Friday's regular session down 1.09% at $23.52. The stock has been trading between $14 and $24 for the past 52 weeks.