Best Buy Urges Investors to Reject Mini-Tender Offer by TRC

TRC Capital Corp. makes unsolicited mini-tender offer for 4 million shares at 4.1% below stock price. Best Buy follows Marvell, Qualcomm and Philips in rejecting the offer from 'mini-tender menace'.

By Julie Jacobson
April 09, 2012
Update (April 10, 10:30 AM): Best Buy CEO Brian Dunn has resigned. Click here to read the story.

Best Buy (NYSE: BBY) is telling its shareholders to reject an unsolicited mini-tender offer made by TRC Capital Corp., a company that Investing Daily calls a “mini-tender menace.”

TRC is looking to purchase up to 4 million shares, or approximately 1.7 percent, of Best Buy's outstanding common stock at a price of $22.00 per share -- about 4.1% less than $22.95 closing price of Best Buy's common stock on April 4, 2012, the day before the offer commenced.

In a statement released today, Best Buy warns that mini-tender offers are designed to avoid many SEC disclosure and procedural requirements by acquiring less than 5% of a company’s outstanding shares.

“As a result,” Best Buy cautions, “mini-tender offers do not provide investors with the same level of protections as provided by larger tender offers under United States securities laws.”

Last month, Marvell Technology urged investors to reject a similar mini-tender offer from TRC. In February, both Qualcomm and Philips rebuffed TRC as well.

Best Buy points investors to an SEC warning that "some bidders make mini-tender offers at below-market prices, hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price."

Best Buy investors who were indeed caught off guard by TRC, and already tendered their shares, may withdraw their shares at any time prior to 12:01 a.m., New York City time, on Friday, May 4, 2012.

Less than two weeks ago, Best Buy reported a fourth-quarter loss of $1.7 billion, and announced it would close 50 U.S. stores and cut $800 million in costs by fiscal 2015.

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