AT&T Warns Shareholders on TRC Capital's Mini-Tender Offer
Yesterday, after the closing bell, U.S. telecom behemoth AT&T Inc. T submitted a regulatory filing with the U.S. Securities and Exchange Commission (SEC), stating the knowledge that TRC Capital Corp. has made an unsolicited “mini-tender” offer, dated Aug 27, 2015. TRC Capital issued a mini-tender offering to purchase up to 3 million shares of AT&T at $31.30 per share. The offered price is 3.2% below AT&T’s current closing price of $32.32.
In its regulatory filing, AT&T clearly states that the company is not associated with TRC Capital by any means and recommends its shareholders to reject this unsolicited offer. In context, mini-tenders are offered by any firm when it seeks to acquire less than 5% of another company’s total outstanding shares. By offering a mini-tender, the firm can avoid many disclosure and procedural requirements that are otherwise mandatory by the U.S. SEC to offer a share purchase tender. Incidentally, TRC Capital has a track record of such mini-tender offers.
In Jul 2015, AT&T scaled up to the highest position in the U.S. pay-TV market with the acquisition of DIRECTV. The company recently announced the expansion of U-verse with its GigaPower offering in cities like Dunwoody, Brookhaven, Woodstock and Milton. With the availability of U-verse GigaPower services, residential and small business customers in these areas will now enjoy high Internet speed of up to 1 gigabit per second. AT&T has also forayed into the wireless market in Mexico with its acquisitions of Grupo Iusacell and Nextel de Mexico.
Zacks Rank
AT&T currently carries a Zacks Rank #2 (Buy). Other favourably ranked stocks in this sector include Sprint Corp. S, T-Mobile US Inc. TMUS and Inteliquent Inc. IQNT. All these stocks hold the same Zacks Rank as AT&T.
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