QLT Inc. (TSX: QLT; Nasdaq: QLTI) has announced plans to buy back US$50 million in company shares from shareholders.
Under the terms of the offer, holders of the company's Nasdaq-traded stock can sell their shares to QLT at between US$2.20 and US$2.50 per share.
The price range represents a 16% to 32% premium on US$1.90, the November 28 closing price of QLT shares on the Nasdaq.
The company said the tender offer will be conducted like a Dutch auction where the auctioneer starts with a high asking price and lowers it until participants are willing to bid.
If the tender offer is fully subscribed, the company will buy back roughly 20 million shares, or 27% of the 74.6 million shares outstanding.
Bob Butchofsky, QLT's president and CEO, said in a release that the company decided to undertake the share buyback to return cash to shareholders and because the company believes the current stock price does not reflect the "intrinsic value" of QLT.
"We believe this tender offer strikes the right balance between returning capital to shareholders while leaving sufficient funds to continue the development of QLT's business," said Butchofsky.
As of September 30, the company had $155.9 million in cash and cash equivalents and $124.0 million in restricted cash.
The tender offer is scheduled to begin on December 4 and will expire on January 9.
QLT's share price range on the Toronto Stock Exchange during the past week: between $2.20 and $2.60; 52-week high: $5.19; 52-week low: $2.13.