
Coterra Energy Inc. is urging shareholders to reject a “mini-tender” offer by a firm that specializes in buying companies’ stock at prices below market value. (Source: Coterra Energy)
Coterra Energy Inc. is urging shareholders to reject a “mini-tender” offer by a firm that specializes in buying companies’ stock at prices below market value.
Such offers are intended to catch shareholders off-guard and count on investors jumping to the conclusion that the price includes a premium usually associated with larger, traditional tender offers, according to the Securities and Exchange Commission (SEC).
Coterra said on July 26 that it had received notice of an unsolicited offer by TRC Capital Investment Corp. to purchase up to 4 million shares of Coterra stock—or about 0.5% of the E&Ps’ outstanding shares.
TRC Capital’s offer price of $25.50 per share is approximately 4.5% lower than Coterra’s July 21 closing price of $26.71.
“Coterra does not endorse TRC Capital's unsolicited mini-tender offer and recommends that stockholders do not tender their shares in response to TRC Capital's offer because the offer is at a price that is significantly below the current market value of Coterra's common stock,” the company said in a press release. “Coterra urges stockholders who have not responded to TRC Capital's mini-tender offer to take no action.”
The company said any stockholders who tender—or have already tendered—their shares may withdraw them at any time prior to the expiration of the offer, currently scheduled for Aug. 22.
Coterra added that it is not affiliated or associated in any way with TRC Capital, its mini-tender offer or its mini-tender offer documents.
TRC Capital has made similar unsolicited mini-tender offers for stock of other public companies including The Walt Disney Company, PayPal Holdings, Capital One Financial Corp., Williams and Coors, among others.
Mini-tender offers seek less than 5% of a company’s outstanding stock to skirt disclosure and procedural requirements by the SEC. As a result, such offers don’t provide investors with the same level of protection afforded by larger, regulated tender offers.
The SEC has issued cautionary guidance to investors regarding mini-tender offers.
Recommended Reading
Bit by Bit, Drilling Tech Has Evolved
2023-12-06 - The future of drilling tech is faster and more efficient, experts say.
E&P Highlights: Sept. 18, 2023
2023-09-18 - Here’s a roundup of the latest E&P headlines, including an awarding of blocks from Lease Sale 259 and the start of production from a new well.
Vår Energi Awards Baker Hughes 2 Major Contracts
2023-09-29 - The two contracts with Vår Energi significantly reinforces Baker Hughes’ industry leadership and growth trajectory.
The Future of Intelligent Wells? Even Smarter
2023-11-28 - Downhole components are also increasingly coping with higher pressure and temperature conditions and handling more zones than ever.
E&P Highlights: Oct. 30, 2023
2023-10-30 - Here’s a roundup of the latest E&P headlines, including the gas export concept solution for Goliat and subsea equipment delivered for Shenzi North.