ConocoPhillips on Friday was warning its shareholders to steer clear of an unsolicited "mini-tender offer" by TRC Capital Corp. to purchase up to 1.5 million shares, or approximately 0.09%, of ConocoPhillips' outstanding common stock.
The energy giant, which noted that it is in no way associated with TRC Capital, its mini-tender offer or the offer documentation, said the offer price of $73/share is 4.33% below ConocoPhillips' closing share price of $76.31 on March 26, the day prior to the date of the offer.
This is not TRC Capital's first rodeo. The firm has a history of similar below-market mini-tender offers for other companies' shares. Over the last several years the company has made similar offers to shareholders of Spectra Energy (see Daily GPI, Feb. 28, 2007), WestCoast Energy (see Daily GPI, May 22, 2000), EnCana Corp. (see Daily GPI, Feb. 8, 2006) and Southern Company (see Power Market Today, Sept. 6, 2006), to name a few.
Mini-tender offers seek less than 5% of a company's stock, thereby avoiding many filing, disclosure and procedural requirements of the U.S. Securities and Exchange Commission (SEC). "While ConocoPhillips understands that TRC Capital has made many such mini-tender offers in the past, these offers avoid many of the investor protections afforded for larger tender offers, including the filing of disclosure and other tender offer documents with the U.S. Securities and Exchange Commission, and other procedures required by U.S. securities laws," ConocoPhillips said.
"The TRC Capital offer is at a price below the market price of ConocoPhillips' stock and its obligation to purchase shares tendered is not required if certain conditions exist, including any decrease in the company's share price or the unavailability of financing for the purchase on terms satisfactory to TRC Capital," the company added. "In addition, TRC Capital may amend its offer, including the reduction of its offering price."
ConocoPhillips said it strongly urges investors to obtain current market quotations for their shares of common stock, to consult with their financial advisors and to exercise caution with respect to TRC Capital's offer. The company noted that stockholders who may already have tendered their shares may withdraw them by providing the written notice described in the TRC Capital offering documents prior to the expiration of the offer currently scheduled for 12:01 a.m. EDT on April 25.
The SEC has issued an investor alert regarding mini-tender offers. The SEC has noted that, in making the offers at below-market prices, bidders are "hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price." The SEC's investor tips regarding mini-tender offers may be found at www.sec.gov/investor/pubs/minitend.htm.
©Copyright 2008 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.