Hi all,
I am a small shareholder in a company. I've received a tender offer from a second company set up to run the first company's Employee Benefit Trust. They want to buy "up to 5%" of the shares in the company, and they are offering 3% over the London Stock Exchange value on a certain date. That offer is still now worth more than I could get on the stock market, and it avoids charges with my broker.
I've had shares in two companies for a couple of years and I have just sat on them - they've grown nicely. I have never had any experience in trading these things but it is clear that this deal is better than selling through my broker.
HOWEVER, I read the small print and it says that if the offer is oversubscribed, they will give back some of everyone's shares to them, pro rata. This might mean that if it is even only slightly oversubscribed, my remaining very small number of shares sold through my broker can never really make up that attractive-looking premium the second company is paying for the tender offer. Am I right, that it's just a gamble which I can only win if they buy my entire 200 shares?
Alex