Mini-tenders, because they fall below the U.S. Securities & Exchange Commission’s reporting threshold, are used to catch investors by surprise, according to the regulatory watchdog.
“‘Mini-tender’ offers are tender offers that, when consummated, will result in the person who makes the tender offer owning less than five percent of a company’s stock. The people behind these offers — also known as ‘bidders’ — frequently use mini-tender offers to catch shareholders off guard. They count on investors jumping to the conclusion that the price offered includes the premium usually present in larger, traditional tender offers. But with mini-tender offers, the price offered may actually be below the market price,” the SEC warned [emphasis theirs].
TRC Capital’s $65.85-per-share mini-tender is -4.5% under CAH stock’s $68.94 closing price the last trading day before the tender and -8.1% under its March 9 close of $71.16.
“Because TRC Capital’s offer price is below the current market price for Cardinal Health’s common shares, Cardinal Health recommends that shareholders do not tender their shares to TRC Capital,” the Dublin, Ohio-based company said. “TRC Capital’s mini-tender offer seeks less than 5 percent of Cardinal Health’s outstanding common shares, thereby avoiding many disclosure requirements and procedural protections of U.S. securities laws.”