Medtronic is recommending its shareholders reject an unsolicited mini-tender offer from a Canadian investment firm looking to acquire up to 1.5 million of its shares.
Toronto-based TRC Capital Investment Corp. recently floated an offer to buy the Medtronic shares for $77.25 per share — a discount from what the medtech giant's shares have been trading for in recent weeks.
On Friday, Medtronic's stock closed at $82.58, 6.9% higher than TRC's offer price.
The company this week issued a cautionary statement for stockholders: "Medtronic does not recommend or endorse TRC's unsolicited below-market mini-tender offer. Further, because the offer is at a price significantly below the current market price of Medtronic ordinary shares, Medtronic recommends that shareholders not tender their shares."
Tender offers typically provide a premium price to shareholders as an incentive to sell shares. Sometimes tender offers are a tool used by investors who are looking to acquire a significant chunk of a company's stock to mount a takeover bid.
Mini-tender offers, however, seek less than 5% of a company's stock, a level of ownership that avoids regulatory scrutiny. TRC's offer for 1.5 million shares represents just 0.1% of Medtronic's outstanding stock. The offer runs through Feb. 22, but it could also be extended or terminated.
Erika Winkels, a spokeswoman for Medtronic, said the company has not seen other recent mini-tender offers for its stock.
TRC, which has a track record of making similar offers for a wide range of companies across numerous different industries, made one to Medtronic shareholders in 2006, Winkels said.
