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TheStreet Open House

The Walt Disney Company Recommends Stockholders Reject Below-Market-Price “Mini-Tender Offer” By TRC Capital Corporation

Stocks in this article: DIS

The Walt Disney Company (NYSE: DIS) has been notified of an unsolicited "mini-tender offer" made by TRC Capital Corporation (TRC) to Disney shareowners to purchase up to 2,000,000 shares of Disney common stock at a price of $61.00 per share. TRC's offer is for approximately one tenth of one percent of our outstanding shares and the offer price is $3.00 per share, or approximately 4.7 percent, below Disney's closing price of $64.00 on October 8, 2013, the day before commencement of the offer.

Disney recommends that shareowners not tender their shares because the offer price is below Disney’s current share price, and urges them to consult with their financial advisor and exercise caution with respect to TRC's offer. Disney notes that the offer is subject to the satisfaction of a substantial number of conditions, including the absence of any decrease in the market price of Disney shares from the price on the date of the offer and the ability of TRC to finance the offer. If the market price of Disney shares falls or TRC cannot obtain financing, TRC is permitted to terminate the offer and not purchase any shares.

The Securities and Exchange Commission (SEC) has issued an investor alert regarding mini-tender offers, noting that in making the offers at below-market prices, "bidders are hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price." The SEC's investor alert can be found on the SEC Web site at http://www.sec.gov/investor/pubs/minitend.htm.

According to the SEC, mini-tender offers are for not more than 5 percent of a company's stock and typically do not provide the same investor protections required of larger tender offers, including the filing of disclosure documents with the SEC and other procedural protections mandated by U.S. securities laws.

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