BBX Capital (BBX) Tender Offer with 10% upside

Current Price – $18.26

Offer Price – $20

Upside – 10% (due to proration the realized upside will be lower)

Expiration date –  24 April 2015

Trading Strategy – This is not an odd lot offer. 60% of the float will be bought out (meaning proration will be better than 60%), which makes the current spread seem very profitable. The strategy is to buy BBX stock and tender all amount. Then after the tender offer ends and preliminary results of the offer are announced, short-sell the the amount of shares that will not be tendered (based on proration factor).

SEC Filling



BFC Financial Corporation, a Florida corporation, is offering to purchase up to 4,771,221 shares of Class A Common Stock, par value $0.01 per share (together with the associated preferred share purchase rights, the “Shares”), of BBX Capital Corporation (“BBX Capital”) at a price of $20.00 per Share, net to the seller in cash

As of the date of this Offer to Purchase, BFC owns 8,133,353, or approximately 51%, of the issued and outstanding shares of BBX Capital’s Class A Common Stock, and all 195,045 issued and outstanding shares of BBX Capital’s Class B Common Stock. Collectively, these shares represent an approximately 52% equity interest and 74% voting interest in BBX Capital. If all 4,771,221 Shares are purchased in the Offer, BFC would own 12,904,574 shares of BBX Capital’s Class A Common Stock following the Offer, which would represent approximately 81% of the issued and outstanding shares of BBX Capital’s Class A Common Stock and together with the shares of BBX Capital’s Class B Common Stock owned by BFC, would represent an approximately 81% equity interest and 90% voting interest in BBX Capital.


All tendering shareholders will be prorated


Source of Funds:

If the Offer is fully subscribed, we estimate that the total amount of funds that we will require to consummate the Offer, including to pay related fees and expenses, is approximately $95 million. BFC and its wholly owned subsidiaries had cash on hand of approximately $34.7 million as of December 31, 2014 but intend to purchase Shares in the Offer and to pay all related fees and expenses using approximately $95 million of borrowings from one or more financing transactions which we will seek to enter into prior to the Expiration Date. We intend to consider financing alternatives with affiliated entities, including Bluegreen, as well as third party lenders. The Offer is subject to a financing condition, meaning that if we are unable to obtain financing on terms acceptable to us in an amount sufficient to fund the Offer, we will not be required to close the Offer.