TRC Capital's below-market bid is an attempt to avoid disclosure and procedural requirements, the company said.
SPRINGDALE, Ark. –Tyson Foods Inc. issued a statement on June 1, discouraging stockholders from accepting a May 29 unsolicited mini-tender offer of $55.75 per share made by TRC Capital Corp. TRC seeks to purchase up to 2 million shares of Tyson’s stock, which represents about 0.69 percent of its outstanding shares as of the offer date and it expires June 28, 2017. As of 4 p.m. (EST) on June 1, the company’s stock was trading at $58.48 per share, more than 4 percent above the offer price.  

“Tyson Foods recommends that stockholders do not tender their shares in response to TRC Capital’s offer because the offer is at a price below the current market price for Tyson Foods’ Class A shares and subject to numerous conditions,” the company stated in a news release, adding that Tyson is in no way affiliated with TRC or its offer.  

Tyson referred investors to guidance published by the Securities and Exchange Commission (SEC) regarding mini-tender offers on its website and quoted the SEC, stating that some mini-tender offers are made by bidders “hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price.”

“TRC Capital has made many similar mini-tender offers for shares of other companies,” according to Tyson. “Mini-tender offers seek to acquire less than 5 percent of a company’s shares outstanding, thereby avoiding many disclosure and procedural requirements of the US Securities and Exchange Commission that apply to offers for more than 5 percent of a company’s shares outstanding. As a result, mini-tender offers do not provide investors with the same level of protections as provided by larger tender offers under US securities laws.”

Tyson encouraged its investors to consult with their financial advisors regarding the offer and “take no action.” Shareholders who accepted the offer already are able to withdraw their acceptance any time before it expires, according to the company.