Current Price – $42.6
Offer Price – $38 – $45
Upside – 5.5% (if priced at the upper limit)
Expiration Date – 2nd of August, 2017
This tender offer seems to be a step towards Carl Icahn taking the company private. Icahn’s IEP already owns 72.5% of the outstanding shares and will have 80%-95% after the tender. Due to this reason I believe that tender pricing at the upper limit is very likely (thus low risk 5.5% upside). After the tender Icahn will buy-out the remaining public shareholders at the same price or at a premium to the tender price (although agreement was reached that IEP will not increase its ownership stake beyond 95% for the next two years).