Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Tender Offer
Old 10-12-2010, 08:57 PM   #1
Thinks s/he gets paid by the post
wildcat's Avatar
 
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
Tender Offer

I received a letter from VG Brokerage Services yesterday stating that one of the companies I own was doing a tender offer for the shares I owned & to reply by 'x' date.

I haven't called VG to get the details but is there anything else to it other than the company wanting to buy back shares? Any motive aside from that? I am assuming the incentive is either a small % above market or they guarantee a price maybe? Anyone have experience with TOs and if so, what did you do?

- Thanks
__________________

__________________
"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
wildcat is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-12-2010, 09:41 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Feb 2008
Location: Indialantic FL
Posts: 1,199
Depends. You probably should read the prospectus/literature from the company. Some REITs TO cumulative preferred shares because the company could not pay the dividends that were in arrears.
__________________

__________________
JimnJana
"The four most dangerous words in investing are 'This time it's different.'" - Sir John Templeton
jimnjana is offline   Reply With Quote
Old 10-13-2010, 07:11 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
What company is it?

Usually companies do this stuff because they want to retire a bunch of shares (or debt or...) all at once rather than messing around with open market purchases. The most common structure I have seen is a modified dutch auction wheere they offer to buy $X of shares at a price between Y and Z per share. You can submit with a specific min price or just take what everyone else gets. The lowest price that gets them $X of shares is the price everyone gets.

So should you tender? If you were looking to sell anyway and you likethe price offered, its worth considering. I have owned two stocks which have done tender offers and passed on both. In both cases it turned out to be a good choice (the stock rose above the tender price range), but nothing is guaranteed.

Heh, "tender offer." Sounds like something you make to a lady of negotiable affection our for her evening constitutional.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 10-13-2010, 08:45 AM   #4
Thinks s/he gets paid by the post
wildcat's Avatar
 
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
Stable big cap healthcare products company that has been beaten up over the last few years despite the rally off the bottoms

I didn't make a big move @ the bottoms just b/c I don't think the future is always as clear for those types of companies

So even if I hold, any share appreciation above what I have now won't move the portfolio too much but I still think it is still a decent value today

"I have owned two stocks which have done tender offers and passed on both. In both cases it turned out to be a good choice (the stock rose above the tender price range), but nothing is guaranteed."

I was kind of wondering how people have done who decided not to tender. Thanks.
__________________
"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
wildcat is offline   Reply With Quote
Old 10-13-2010, 08:59 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by wildcat View Post
I was kind of wondering how people have done who decided not to tender. Thanks.
Personally, I view the tender offer as a modest plus, but evaluate it like any other offer to buy my shares: is this a full valuation such that I would be happy to sell? Never seen a tender offer at what I would regard for full value of what I own.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What ETFs Really Offer RonBoyd FIRE and Money 3 06-25-2008 01:46 PM
New Job Offer Bimmerbill Other topics 5 07-20-2006 02:56 PM
Got the offer, but... brewer12345 Young Dreamers 22 03-29-2005 01:05 PM
Got ER pension offer Bill J. Hi, I am... 21 08-12-2004 10:04 AM

 

 
All times are GMT -6. The time now is 04:30 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.