Marsh & McLennan Companies Inc. warned shareholders against accepting a tender offer from TRC Capital that is below the stock's current value.
The New York-based services firm, parent company of insurance broker Marsh, said it was notified of an unsolicited “mini-tender” offer by TRC Capital Corporation to purchase up to three million shares of its common stock, representing less than 1 percent of MMC's outstanding shares.
Ontario, Canada-based TRC Capital has made many similar below-market mini-tender offers for other companies' shares for its profit
A mini-tender, according to the Securities & Exchange Commission, is an offer to purchase less than 5 percent of the company's stock.
According to an SEC advisory, mini-tender bidders “are hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price.”
The TRC offer for MMC was for $25.50 per share, and MMC said it is 3.5 percent below the closing price of MMC's stock on July 5, 2006, the day prior to the date of the offer, and a 4.4 percent discount to the closing price on July 7, 2006 of $26.66.
MMC said it does not recommend or endorse this unsolicited mini-tender offer. The firm continued that an offer of this type avoids many of the investor protections afforded to larger tender offers, including the filing of disclosure and other tender offer documents with the SEC and other procedures mandated by U.S. securities laws.
MMC said stockholders who may have tendered their shares are advised that they may withdraw their shares by providing the written notice described in the TRC Capital offering documents prior to the expiration of the offer currently scheduled for 12:01 a.m. EDT on Aug. 4.
Additional information on mini-tender offers is available at www.sec.gov/investor/pubs/minitend.htm.
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