Parroting the responses of Dynegy Inc. and Mirant a day earlier, Aquila Inc. and Reliant Resources Inc. on Thursday advised their shareholders to beware of the unsolicited mini-tender offers of Main Street AC, which is seeking to buy 4.9% of all four companies (see Daily GPI, Sept. 5).

Main Street wants to buy Aquila’s Class A common stock for $5.45 a share. Aquila, in turn, said it would make “no recommendation” on the unsolicited offer. However, it cautioned that “offerees in a mini-tender offer should be aware that, once they accept the offer, they have no right to withdraw any stock tendered in the offer. Often the bidder has no current source of funding to complete a tender offer and has the right to delay closing of shareholder acceptances indefinitely.”

Accordingly, the right to receive payment for tendered shares is uncertain and it is possible that the bidder could delay the closing until the share price is trading above the mini-tender offer price. In the case of Main Street, its tender offer materials indicate “their source of funding is, at best, speculative and that they could indefinitely delay payments for shares that are tendered.” The Kansas City-based energy merchant recommended that shareholders consult with financial advisers before making a decision.

Likewise, Houston-based Reliant Resources said it had learned of the offer to purchase its stock for $7.32 a share. “Reliant Resources does not recommend or endorse this unsolicited offer and urges its stockholders to use extreme caution in considering the offer,” it said in a written statement. Reliant Resources, like the other three companies, also suggested that stockholders review an investor alert published by the Securities and Exchange Commission regarding mini-tender offers, which can be found on its web site at www.sec.gov/investor/pubs/minitend.htm.

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