The Kroger Co. received notice of an unsolicited "mini-tender" offer by TRC Capital Corp. to purchase up to 4 million Kroger common shares at a price of $28.70 per share in cash. The offering price was 4.24 percent below the closing price per share of Kroger's common shares on April 13, the last trading day before the offer was commenced.
Mini-tender offers seek to acquire less than 5 percent of a company's shares outstanding, and TRC Capital's offer is for approximately 0.44 percent of the common shares outstanding. Consequently, it can avoid many disclosure and procedural requirements of U.S. Securities and Exchange Commission rules that apply to offers for more than 5 percent of a company's shares outstanding.
The SEC has cautioned investors that some bidders making mini-tender offers at below-market prices are "hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price." Kroger noted that TRC Capital has made many similar unsolicited mini-tender offers for shares of other public companies.
Kroger said it does not endorse TRC Capital's unsolicited mini-tender offer and recommends that shareholders do not tender their shares because the offer is at a price below the current market price for Kroger's shares and subject to numerous conditions.