The Canadian firm is infamous for its mini-tender offers, which it also recently made at Fox and Intel. The SEC and companies targeted by TRC Capital say that mini-tenders prey on unsophisticated investors, using official-looking documents to lure them into making a bad deal. “They count on investors jumping to the conclusion that the price offered includes the premium usually present in larger, traditional tender offers,” the SEC says, even though it may be below the trading price. Since TRC seeks less than 5% of a company’s shares, it doesn’t have to register its offer with the SEC — although it still can’t commit outright fraud. In Disney‘s case, the company says this morning that last week TRC offered $61 a share for 2M shares, equal to 0.1% of the total. The company says the offer is $3 below the trading price on October 8, the day before TRC launched its mini-tender. It adds that there are a lot of conditions on TRC’s proposal including “the ability of TRC to finance the offer.” The firm also can terminate it without buying any shares. Disney wants investors to know that it “is not associated in any way with TRC, the mini-tender offer or the offer documentation.” Those who have already swallowed TRC’s bait can withdraw if they send a written notice to the firm before November 7 when its offer expires.
Here’s Disney’s release: (more…)