Officers at Regeneron Pharmaceuticals Inc. in Greenburgh have cautioned shareholders not to respond to an unsolicited mini-tender offer by a Canadian firm well known in the securities industry for the practice of buying stock at discount prices from unwitting investors while avoiding regulators’ scrutiny.
TRC Capital Corp. in Toronto on Dec. 28 offered to purchase up to 1 million shares, or slightly more than 1 percent of outstanding Regeneron common stock, at a price about 4.5 percent below the last closing price of the stock before the offer was made. The $161.25 per-share offer was a nearly 10.8 percent discount to the price of the biotechnology company’s common stock on Jan. 3.
“Regeneron does not endorse TRC’s offer and recommends that shareholders do not tender their shares in response to the offer because it is a so-called ‘mini-tender’ offer at a price below the current market price for Regeneron shares and is subject to numerous conditions,” the company said in a Jan. 4 press release.
Regeneron, the state’s largest biotech employer, urged shareholders considering the offer to obtain current market quotations for their shares, review the conditions to the offer, consult with their broker or financial adviser and “exercise caution.”
Mini-tender offers seek to acquire less than 5 percent of a company’s outstanding shares and thereby avoid many disclosure and procedural requirements of the Securities and Exchange Commission (SEC) for larger tender offers. The SEC on its website has cautioned investors 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.”