Current Price – $3.95
Tender Price – $4.0 - $4.5
Upside – 14% (if priced at the upper limit)
Expiration Date – September 19, 2018
GlobalSCAPE launched $15m tender offer to purchase 15%-17% of outstanding shares. There is also an odd-lot provision. Tender will be funded by cash on hand. With shares trading below or at the lower limit, odd-lot holders have risk free upside in case the tender ends up priced higher than $4/share.
However, insiders own 42% of shares and at least four of them have indicated intentions to participate in the tender. Neither amounts nor price were specified.
GSB traded at $3.5 prior to tender announcement and over the last 5 years has only briefly breached $4.5/share threshold (May-Aug 2017), most of the time staying in the $3-$4 range.
Due to points above I would expect tender to be oversubscribed at $4 level.
For those interested in GSB beyond the tender there is a good VIC write-up and discussion on the company. GSB has recently gone through turbulent period of restating financials, internal investigation and large cost cutting lay-offs.