Great-West Lifeco Inc. has issued a cautionary statement to its investors regarding a mini-tender offer from Ocehan LLC to purchase up to 50,000 of Lifeco’s common shares.
The unsolicited offer, which targets Canadian residents, proposes a share purchase price approximately 19.7% below the closing market value on the Toronto Stock Exchange (TSX) as of Oct. 24, 2024, the last trading day before the offer commenced.
Lifeco emphasized it does not endorse Ocehan’s offer and has no association with Ocehan LLC. In its statement, the company strongly advised shareholders to consider the offer with caution:
“Lifeco urges shareholders to obtain current market quotes for their shares and to consult with their broker or financial advisor in considering Ocehan’s offer. According to Ocehan’s offer documents, Lifeco shareholders who have already tendered their shares can withdraw their shares no more than 30 days after the date of delivery of their tender form to the depositary by following the procedure described in the offer documents.”
A news release noted mini-tender offers, such as the one from Ocehan, involve the purchase of less than 5% of a company’s shares, allowing the offer to bypass standard investor protections under Canadian law. These protections typically include detailed disclosure and other procedural safeguards.
The Canadian Securities Administrators (CSA) and the US Securities and Exchange Commission (SEC) have raised concerns about mini-tender offers, warning that they may mislead investors by setting prices significantly below current market values.
“Some bidders make these offers at below-market prices hoping they will catch investors off guard if the investors do not compare the offer price to the current market price,” the SEC has noted in prior statements regarding similar offers.
In addition to the initial 50,000-share offer, Ocehan LLC retains the right to purchase an additional amount, though this will not exceed 2% of Lifeco’s outstanding common shares, according to the news release.
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