Potash Corp. of Saskatchewan Inc. said May 13 that it has become aware of an unsolicited “mini-tender” offer made by TRC Capital Corp. (TRC Capital) to purchase up to 5,000,000 PotashCorp common shares, or approximately 0.60 percent of PotashCorp’s outstanding common shares, at a price of C$19.95 per common share. It says the offering price represents a discount of 4.41 and 4.68 percent, respectively, to the closing prices of PotashCorp common shares on the Toronto Stock Exchange and New York Stock Exchange on May 10, 2016, the last trading day before the mini-tender offer was commenced.
PotashCorp does not endorse this unsolicited mini-tender offer and recommends that shareholders do not tender their shares. PotashCorp said it is not associated with TRC Capital, its mini-tender offer or the mini-tender offer documentation.
PotashCorp said TRC Capital has made similar unsolicited mini-tender offers for shares of other public companies. It said these offers are designed to avoid many disclosure and procedural requirements applicable to most take-over bids and tender offers under Canadian and United States securities legislation.
PotashCorp said the Canadian Securities Administrators (CSA) have expressed serious concerns about mini‑tender offers, such as the possibility that investors might tender to a mini-tender offer based upon a misunderstanding of the terms of the offer, including the per securities price available under the offer relative to the market price of such securities.
The U.S. Securities and Exchange Commission (SEC) has also issued comments about mini-tender offers. The SEC states: “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.”
PotashCorp urges shareholders to obtain current market quotations for their shares, consult with their broker or financial advisor and exercise caution with respect to TRC Capital’s offer. PotashCorp recommends that shareholders who have not responded to TRC Capital’s mini-tender offer take no action. It says shareholders who have already tendered their shares should take actions to withdraw them including reviewing the withdrawal procedures in TRC Capital’s offering documents.