20% potential upside.
This is mandatory tender offer setup where returns hinge entirely on how the upcoming tender is structured. Earlier this year, a major global industry player acquired a controlling stake in the target company. Under local securities laws, the buyer must launch a tender offer for the remaining shares, and they have already confirmed they’ll follow through. There’s a chance the buyer will decide to bid for all of the remaining minority stake.
Crucially, the offer price can’t be lower than what they paid for the initial block. Even if full buyout doesn’t materialize, the potential downside will be limited as the minimum required tender size is half of the minority float. Thus, at least half of the tendered shares will be accepted at a premium. The timeline for launching the offer is six months.
This post is for paid subscribers, to continue reading please log in or sign up.