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Ponos Captial Mini Tender for Verizon Shares

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  • Jul 16th, 2020 2:06 am
[OP]
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Oct 21, 2014
1726 posts
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Burlington, ON

Ponos Captial Mini Tender for Verizon Shares

Got this message from HSBC. Can anyone explain how the scam Ponos capital is playing here works? The shares are quoted at $54.79 but they're doing a mini-tender at $60. I've received mini-tenders before but usually it's way under market price.

Dear client, please be advised that there is a voluntary Mini-Tender announced for VERIZON COMMUNICATIONS by PONOS CAPITAL that may require your action prior to the deadline. Holders have the following options:

Option 1: To receive $60.00 USD net per share of VERIZON COMMUNICATIONS tendered. Subject to Proration

Option 2: Do Not Participate. (Default Option)

To exercise, please contact an Investment Representative at 1-800-760-1180 or 1-416-868-3898 prior to July 29, 2020 (5:00 PM Eastern Time). Thank you for giving this your prompt attention. Yours sincerely, HSBC InvestDirect.

Note: Event is subject to change without prior notice. Solicitation fees: USD 0.60$ per share deposited per beneficial holder. Certain restrictions, fees, and tax consequences may apply. The important information above is not exhaustive, holders are strongly advised to review any published material regarding this security and or corporate action event prior to submitting their instructions.
4 replies
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Mar 25, 2012
1872 posts
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Kelowna
Gungnir wrote: Got this message from HSBC. Can anyone explain how the scam Ponos capital is playing here works? The shares are quoted at $54.79 but they're doing a mini-tender at $60. I've received mini-tenders before but usually it's way under market price.

Dear client, please be advised that there is a voluntary Mini-Tender announced for VERIZON COMMUNICATIONS by PONOS CAPITAL that may require your action prior to the deadline. Holders have the following options:

Option 1: To receive $60.00 USD net per share of VERIZON COMMUNICATIONS tendered. Subject to Proration

Option 2: Do Not Participate. (Default Option)

To exercise, please contact an Investment Representative at 1-800-760-1180 or 1-416-868-3898 prior to July 29, 2020 (5:00 PM Eastern Time). Thank you for giving this your prompt attention. Yours sincerely, HSBC InvestDirect.

Note: Event is subject to change without prior notice. Solicitation fees: USD 0.60$ per share deposited per beneficial holder. Certain restrictions, fees, and tax consequences may apply. The important information above is not exhaustive, holders are strongly advised to review any published material regarding this security and or corporate action event prior to submitting their instructions.
It could be that they're having to offer a premium to the current market value because they know they've got an uphill battle at trying to acquire even the desired percentage of shares they're trying to acquire? If you received the message from your discount brokerage, it's legitimate in that there would be filed and documented securities filings for this.

Instead of asking yourself those questions, ask yourself...do I want to be in Verizon Communications in 1, 3, or 5 years from now? If not, or if you had been thinking of exiting, I see no reason not to accept the offer. But if you are still wanting to own Verizon Communications and are satisfied with where the company is going strategy-wise, I can see no reason for accepting the offer.


Edit: Disregard most of the above. In the U.S., if the offer is for less than 5% of the outstanding shares, they don't have to file formal securities filings with the U.S. Securities and Exchange Commission. Not sure exactly how the price could end up being below the quoted $60.00 share offer, but you should read https://www.sec.gov/fast-answers/answersminitenhtm.html for starters.

Cheers,
Doug
[OP]
Deal Addict
Oct 21, 2014
1726 posts
2396 upvotes
Burlington, ON
dmehus wrote: It could be that they're having to offer a premium to the current market value because they know they've got an uphill battle at trying to acquire even the desired percentage of shares they're trying to acquire? If you received the message from your discount brokerage, it's legitimate in that there would be filed and documented securities filings for this.

Instead of asking yourself those questions, ask yourself...do I want to be in Verizon Communications in 1, 3, or 5 years from now? If not, or if you had been thinking of exiting, I see no reason not to accept the offer. But if you are still wanting to own Verizon Communications and are satisfied with where the company is going strategy-wise, I can see no reason for accepting the offer.


Edit: Disregard most of the above. In the U.S., if the offer is for less than 5% of the outstanding shares, they don't have to file formal securities filings with the U.S. Securities and Exchange Commission. Not sure exactly how the price could end up being below the quoted $60.00 share offer, but you should read https://www.sec.gov/fast-answers/answersminitenhtm.html for starters.

Cheers,
Doug
Thanks.. if I were to accept does the offer become immediately binding and I would get paid in a few days? I mean I could easy just sell out at $60 and then immediately rebuy the shares at market rate which is lower, or do they they have the ability to withdraw the offer after I have accepted?
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Mar 25, 2012
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Kelowna
Gungnir wrote: Thanks.. if I were to accept does the offer become immediately binding and I would get paid in a few days? I mean I could easy just sell out at $60 and then immediately rebuy the shares at market rate which is lower, or do they they have the ability to withdraw the offer after I have accepted?
I don't have access to the offering document, so can't comment on that, but from reading the SEC's website, mini-tender offers aren't subject to public filing requirements so you would only get such a document upon entering into, or proceeding to enter into, a contract to sell your securities. It sounds like the offer is binding on you to sell your shares and be paid for your shares, but not necessarily at that advertised price. The full details, caveats, exceptions, and such can only be known by reading, cover to cover, that offering document.

For me, and I don't own Verizon Communications, it's enough to make me say, "pass." :)

Cheers,
Doug

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