Tyson Foods Inc. announced that it has received notice of an unsolicited mini-tender offer by TRC Capital Corporation to purchase up to 2 million shares of Tyson Foods, Inc. Class A common stock, which represents approximately 0.69 percent of the shares outstanding as of the May 29, 2017 offer date. TRC Capital’s offer price of $55.75 per share is approximately 4.44 percent lower than the $58.34 closing share price of Tyson Foods Class A common stock on May 26, 2017 – the last trading day prior to the date of the offer.
Tyson Foods recommends that stockholders do not tender their shares in response to TRC Capital’s offer because the offer is at a price below the current market price for Tyson Foods’ Class A shares and subject to numerous conditions. Tyson Foods is not affiliated or associated in any way with TRC Capital, its mini-tender offer or the offer documentation.
TRC Capital has made numerous mini-tender offers to companies in the past, including PayPal, Yahoo, AT&T and Baxalta, all of which were rejected by those companies. Companies that make mini-tender offers seek to buy a small portion of the company’s equity directly from shareholders, usually at a below-market price. Investment website Seeking Alpha reports that by trying to acquire less than 5% of the company's outstanding shares, mini-tender offers bypass SEC regulations that regular tender offers need to meet. Instead, mini-tender offers have to meet only the anti-fraud Regulation 14E, which requires bidders to:
- Not engage in fraud or deceptive practices
- Hold open tender offers for minimum time periods
- Make prompt payment to investors after the offer closes.
“The SEC has cautioned investors that some bidders making mini-tender offers at below-market prices are ‘hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price,.’” Tyson said in its statement. “More on the SEC’s guidance to investors on mini-tender offers is available at www.sec.gov/investor/pubs/minitend.htm.”
Source: Tyson Foods, Seeking Alpha