TEMPE, Ariz. (AP) -- First Solar Inc. said Friday that it is the latest target of a below-market offer from TRC Capital Corp.
TRC has made a number of below-market bids for an array of companies, including Sherwin-Williams, Ford Motor Co. and Royal Philips Electronics.
First Solar said that the "mini-tender" offer by TRC offers shareholders $30 per share, 5 percent below the company's closing price of $31.58 on the day before the offer commenced. TRC is seeking to buy up to 2 million shares, or roughly 2.3 percent, of First Solar's common stock.
A mini-tender offer is an offer to buy less than 5 percent of a company's outstanding shares, which doesn't trigger the same prohibitions and shareholder protections that a bigger offer would.
First Solar reminded shareholders that as a result, this sort of offer does not provide investors with the same level of protections that a larger tender offer would under U.S. securities law. The solar products company, based in Tempe, Ariz., said it does not endorse the offer and suggest that stockholders do not tender their shares.
First Solar joins a growing list of corporations warning investors about TRC, including paint company Sherwin-Williams Co., cigarette maker Altria Group Inc., drug maker Gilead Sciences Inc. and defense contractor Raytheon Co.
The U.S. Securities and Exchange Commission has also cautioned investors about these offers, saying that they are may "catch investors off guard" if they do not compare the offer price to the current market price.
TRC, which is privately held and based in Toronto, was founded by securities lawyer Lorne Albaum.
Albaum said that the offers are intended to appeal to shareholders with less than 100 shares, known as odd lots. He said the shareholders can get a better deal by selling in a mini-offer than trying to sell less than the normal trading unit. Trading commissions for odd lots are generally higher than for standard lots.
As for critics, he noted that shareholders have the right to withdraw from the deal before the expiration of the offer.
First Solar's stock price has roughly doubled since this summer. Its shares jumped in early trading Friday but ended the day down 9 cents to close at $30.21.
For more information on mini-offers, visit the SEC's website: