Arch Coal Target Of Mini-tender Offer By TRC Capital

By St. Louis Business Journal

Arch Coal Inc. is the target of an unsolicited ⿿mini-tender⿝ offer by TRC Capital Corp. of Toronto to purchase up to 5 million shares, or about 2.35 percent, of Arch stock at $16.10 per share.

The share price is a 4.85 percent discount to Archâ¿¿s closing price Tuesday, the day prior to the offer.

Arch (NYSE: ACI) said it recommends that shareholders not tender their shares in response to the offer. Arch was trading up 2 percent at $16.62 a share Friday morning.

TRC Capital, of Toronto, a private investment firm founded and led by CEO Lorne Albaum, routinely makes below-market ⿿mini-tender⿝ offers. In the past it has targeted Philip Morris, Potash Corp. and Kimberly-Clark. Locally, TRC has made offers to shareholders of Emerson in May, Monsanto a year ago, and Anheuser-Busch in 2006.

Mini-tender offers are designed to seek less than 5 percent of a companyâ¿¿s outstanding shares, thereby avoiding many disclosure and procedural requirements of the Securities and Exchange Commission, and as a result, mini-tender offers do not provide investors with the same level of protections that larger tender offers under United States securities laws provide.

The SEC has cautioned investors about these offers, noting that ⿿some bidders make mini-tender offers at below-market prices, hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price.⿝

St. Louis-based Arch Coal is led by Steven Leer, chairman and chief executive. Its $3.4 billion acquisition earlier this year of International Coal Group makes Arch Coal the second-largest metallurgical coal supplier in the U.S.

Copyright 2011 American City Business Journals

http://www.bizjournals.com/stlouis/news/2011/10/21/arch-coal-target-of-mini-tender-offer.html?ana=thestreet

Copyright bizjournals.com 2010

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