Current Price – $52.18
Offer Price – $50.73 - $57.58
Upside – 10% or $540 (if priced at the upper limit)
Expiration Date – 16th of June, 2017
This is a standard Dutch tender offer and YHOO shares currently trade in the middle of the buyout range.
No proration for Odd Lot Holders (99 shares and less)
I do not have any position in this tender, but maybe some other members will find the situation attractive.
Yahoo launched $3bn tender offer and yesterday announced pricing range in USD terms - previously only pricing relative to Alibaba shares was indicated. Shares to be acquired in the tender represent c. 8% of YHOO market cap. Odd lot priority applies to shareholders of less than 100 shares.
I do not have any compelling arguments as to why the tender should be priced materially above the current share price - this is a large cap transaction, so market is likely to be quite efficient (especially when tender is only for 8% of the shares). At the same time, there also do not seem to be any reasons why would anyone be willing to tender shares below the current market price, as daily liquidity averages $1bn (and even reached $8bn two days ago), so this tender offer is not providing any significant liquidity opportunity that large shareholders might be compelled to take below the current market prices. Thus my expectation that the tender will be priced somewhere around current levels.
Tender is closing on Friday (tomorrow), so anyone willing to participate should check with their broker for their internal deadlines (for IB it is usually midday of the expiration date).