Current Price –PG $88.31, COTY $25.99;
Offer Price – $1.075 stock of COTY for $1 stock of PG (subject to upper limit of 3.9033 COTY shares per share of PG);
Upside – 7.5% or $650 for Odd Lot holders;
Expiration date – September 29, 2016;
Odd Lot holders of PG (less than 100 shares) are not subject to proration;
Important items to consider:
– Final exchange ratio will be determined close to the expiration of the offer (valuation dates are 23rd, 26th and 27th of September 2016), therefore final payoff/loss might differ from the indicated one and depending on how shares move in the meantime this transaction might even result in losses for investors. On 28th of September the exchange ratio will already be known, so one might wait till then for the trade.
– To hedge the risk of COTY share price fluctuations, one might consider shorting COTY. Borrow fee at the moment stands at 13% annually.
– This deal is more risky than the standard odd lot tenders usually posted on this site. Do your own due diligence before investing.
The transactions are being undertaken to transfer certain assets and liabilities relating to P&G’s global fine fragrances, salon professional, cosmetics and retail hair color businesses, along with select hair styling brands, to Coty. As promptly as practicable following completion of the exchange offer Green Acquisition Sub Inc., a wholly owned subsidiary of Coty, will merge with and into Galleria Company, with Galleria Company surviving the merger and becoming a wholly owned subsidiary of Coty. Pursuant to the Merger, each share of Galleria Company common stock will automatically convert into the right to receive one fully paid and non-assessable share of class A common stock, par value $0.01 per share, of Coty.
For each $1.00 of P&G common stock accepted in the exchange offer, you will receive approximately $1.075 of shares of Galleria Company common stock, based on the Average P&G Stock Price and the Average Coty Stock Price determined by P&G on valuation dates and subject to an upper limit of 3.9033 shares of Galleria Company common stock per share of P&G common stock. If the upper limit is in effect, you will receive less than $1.075 of shares of Galleria Company common stock for each $1.00 of P&G common stock that you tender, and you could receive much less.
The Average P&G Stock Price and the Average Coty Stock Price will be determined by P&G by reference to the simple arithmetic average of the daily volume-weighted average prices (“VWAPs”) of shares of P&G common stock and shares of Coty common stock on the New York Stock Exchange (“NYSE”) during a period of three consecutive trading days (currently expected to be September 23, 2016, September 26, 2016 and September 27, 2016) ending on and including the second trading day preceding the Expiration Date.
No proration for Odd Lot holders:
Beneficial holders (other than plan participants in a P&G U.S. benefit plan) of fewer than 100 shares of P&G common stock who validly tender all of their shares will not be subject to proration if the exchange offer is oversubscribed.