Current Price – $44.6
Tender Price – $42.0 – $47.0
Upside – 5.5% (if priced at the upper limit)
Expiration Date – October 2nd, 2018
Thomson Reuters announced $9bn buyback, equivalent to 30% of outstanding shares. Although the offer is large, controlling shareholder Woodbridge (64% owner) will also make a proportionate tender, meaning that 2/3 of the tender amount is already reserved for Woodbridge. Tender price will be determined by the remaining minority shareholders.
Tender offer is conditioned and will be funded by proceeds from the sale of Financial & Risk business to Blackstone, that is expected to close one day before the expiration of the offer.
I have no arguments neither in favor for lower nor upper limits and would expect the tender to be priced around current market prices (or price at the time of tender expiration).
There is odd-lot priority for holders of 99 shares or less.
15 thoughts on “Thomson Reuters (TRI) – Tender Offer – 5% Upside”
Looks like it’s priced very efficiently. I think tendering at 44 is a good way to play this.
So, if we assume that 2/3 of the offer are reserved for the Woodbridge, in order of the offer to be oversubscribed, at least 10% of the remaining 36% must tender their shares.
They will tender the same % of non-Woodbridge shares that tender so their ownership % remains the same.
Has anybody been able to tender the shares? IB doesn’t show this as a corporate action.
I sent IB a ticket and they added it. They often need a reminder, but respond quickly.
Only 20% of shareholders submitted shares for tender. Plus Woodbridge’s proportional tender that put the total tender below the $9bn TRI was going to purchase and thus they are buying all tendered shares at $47. I would have assumed a higher participation rate.
Surprising tender results indeed.
Only $6.5bn returned to shareholders through this tender. The remaining $2.5bn will be paid out as special dividends in Nov ($4.45/share).
This just hit my account and they are withholding 15% in taxes!
Will I get this back against my US taxes, or is it basically a 15% loss. Does anybody have experience with this?
Are you a U.S. based investor?
I got hit for 25% with fidelity. I need to call them. But i believe you can get it back during tax time since your selling price will be lower than your cost basis. At least i hope that’s the case
You do not want to use the tax W/H amount to merely reduce your cap gain (or increase your cap loss). Use it as a tax credit (which is dolloar-for-dollar).
I called fidelity and they have refunded the extra 10% withholding (15% should have been withheld not 25%).
The tax situation is a mess though. As a US investor, do I need to file a claim with the Canadian revenue service ( http://www.crc-scrc.ca/english/downloads/refund.pdf ) ?
I presume you are US-based investors trading thru non-retirement accounts. For dividends from Canadian companies, there is a 15% W/H tax, which you get back as a Form-1040 tax credit. (Make sure to carry the credit backward and then forward up to 10 years, if you cannot fully use the credit for 2018 tax year.)
But I am surprised that tender offer payout is treated the same as dividends.
Did you guys see that 15% W/H as foreign tax paid on your 1099? I am curious to know.
Short answer Lu Feng is yes. I do see the 15% W/H as foreign tax paid.
I had the same withholding at Interactive Brokers. They said it was done at the source. It does appear as foreign tax paid on my 1099.