TriNet Group (TNET) – Odd-Lot Tender Offer – $270 Upside
TriNet Group is a $6.2bn market cap human resource services provider to SMEs. The company has recently launched a tender for $640m worth of its stock (10% of outstanding) at $107/share. Shares currently trade slightly below the tender offer price, at $104.29/share. The tender offer is likely to be oversubscribed, but odd lot accounts (<100) will be accepted on a priority basis. At current prices, odd lots can pocket a basically ‘risk free’ upside of $270 in about one month. The tender expires on August 28. Concurrently with the tender, TNET has also entered into a separate agreement to repurchase $360m worth of stock from its major shareholder PE firm Atairos Group (owns 36%). So in essence, you could say TNET is repurchasing $1bn worth of its stock (16% outstanding) and Atairos is tendering pro-rata. However, the major shareholder has also agreed to sell additional shares if the tender ends up undersubscribed. Directors own just over 1% and intend to participate pro-rata as well. TNET will partially finance the tender with the just announced senior notes offering of $400m.