Tiffany & Co. is telling its shareholders to reject a “mini-tender” offer being made by TRC Capital Corp.
“Tiffany & Co. strongly recommends against tendering shares in response to this unsolicited offer. Tiffany & Co. is not associated with TRC Capital Corporation or its offer,” the company said in a statement.
Tiffany said in its statement that it learned TRC Capital Corp. is trying to purchase up to 3 million shares of Tiffany stock, just over 2% of the total company stock, for $29.50, more than 4% below the closing price of Tiffany’s common stock on Dec. 6.
“TRC Capital has made many such ‘mini-tender’ offers for the shares of other companies for its profit, Tiffany said. “These offers are devised to seek less than five percent of a company’s outstanding shares, thereby avoiding many disclosure and procedural requirements of the U.S. Securities and Exchange Commission (SEC) because they are below the SEC’s threshold to provide such disclosure and procedural protections for investors.”
The SEC has cautioned investors about ‘mini-tender’ offers in an investor alert, noting that these offers ‘have been increasingly used to catch investors off guard and that many investors who hear about ‘mini-tender’ offers ‘surrender their securities without investigating the offer, assuming that the price offered includes the premium usually present in larger, traditional tender offers. But they later learn that they cannot withdraw from the offer and may end up selling their securities at below-market prices.
Tiffany advised shareholders to consult their financial advisors and to exercise caution with respect to TRC Capital’s offer. In addition, the company said that shareholders who have already tendered should consider withdrawing their shares if permitted under TRC Capital’s Offer to Purchase documents. The offer is currently scheduled to expire at Jan. 6, 2005.