Blog Coverage: Pfizer Cautions Shareholders Against Accepting TRC Capital Corporation’s Mini-Tender Offer

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LONDON, UK / ACCESSWIRE / May 26, 2017 / Active Wall St. blog coverage looks at the headline from pharmaceutical giant Pfizer Inc. (NYSE: PFE) as the Company announced on May 24, 2017, that it had received an unsolicited mini-tender offer from Ontario, Canada based investment firm TRC Capital Corporation. Pfizer has recommended that its shareholders do not respond to TRC’s offer as it is below the market price of Pfizer’s shares. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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TRC’s Mini-Tender Offer

TRC offered to buy up to 4 million Pfizer’s shares at a price of $31.60 per share in cash. The offer represents approximately 0.067% of Pfizer’s total outstanding shares as on May 15, 2017, the date when the offer was made.

According to Pfizer, TRC’s offer price of $31.60 per share is approximately 4.27 % lower than the closing share price of $33.01 for Pfizer’s stock on May 12, 2017, the last trading day before the offer was made.

Reasons for Pfizer’s negative recommendation

The primary reason that Pfizer wants shareholders to reject TRC’s offer is that it is below market price.

The other major reason is TRC’s modus operandi. TRC has a history of making mini-tender offers to various Companies to acquire their shares at less than market value. A mini-tender offer is usually made to acquire less than 5% common stock of any Company. The offer is made in such a manner that the investors are caught unaware and do not get the time to compare the offer price and actual market price of their shares. The US Securities and Exchange Commission (SEC) mandates that any offer for more than 5% of any Company’s outstanding shares have to adhere to many disclosure and procedural requirements. By making a mini tender offer this SEC requirement can be circumvented. This leaves shareholder’s unprotected and vulnerable as they are not protected by the US securities laws.

The matter is so serious that the SEC has already cautioned investors about the dangers associated with mini-tenders. The SEC has provided with a list of ‘Dos and Don’ts’ as guidance to investors on its site.

In the meanwhile, Pfizer has urged its investors to get the latest market prices of their shares by either consulting with their brokers, financial advisors, and be cautious about TRC’s offer. Those investors who have already responded to TRC’s can withdraw their shares before the expiration of the offer date, i.e. June 14, 2017.

Some of the recent mini-tender offer from TRC

On May 05, 2017 TELUS Corporation (NYSE: TU) received an unsolicited mini-tender offer from TRC, which the Company asked its shareholders to reject as the offer was below its market price.

On April 07, 2017, Enbridge Inc. (NYSE: ENB) cautioned its shareholders that the mini-tender offer made by TRC is market price of Enbridge’s shares.

On April 19, 2017, The Kroger Co. (NYSE: KR) received an unsolicited “mini-tender” offer from TRC Capital Corporation, which was below the market price for Kroger’s shares. It recommended its shareholders to reject the offer.

On March 10, 2017, BCE Inc. (NYSE: BCE) recommended that its shareholders reject TRC Capital’s “mini-tender offer” as the offer is below market price for BCE’s shares.

On March 24, 2017, Exxon Mobil Corporation (NYSE: XOM) recommended that its 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 ExxonMobil’s shares.

Stock Performance

At the close of trading session on Thursday, May 25, 2017, Pfizer’s stock price rose slightly by 0.34% to end the day at $32.16. A total volume of 17.29 million shares were exchanged during the session. The Company’s share price has gained 2.65% in the past six months. The Company’s shares are trading at a PE ratio of 26.96 and have a dividend yield of 3.98%. The stock currently has a market cap of $193.15 billion.

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