Sun Life Financial has warned investors against Obatan LLC’s unsolicited bid to purchase 50,000 common shares.
Obatan’s “mini-tender offer” places Sun Life’s shares at a significantly lower price than its market value on US and Canadian stock exchanges, translating to a 35.7% discount below Sun Life’s closing price on the TSX and NYSE on April 07.
“Sun Life is not associated with Obatan and does not recommend or endorse acceptance of this unsolicited offer. Shareholders are not required to sell their shares to Obatan,” the statement read.
Obatan insisted that Sun Life shareholders who have already tendered their shares can withdraw them at any time before 5:00pm on May 31. The same offer was also made to Sun Life shareholders in the UK and Ireland.
Canadian Securities Administrators (CSA) and the U.S. Securities and Exchange Commission (SEC) have voiced concerns about "mini-tender offers,” which are designed to avoid disclosure and procedural requirements. As such, shareholders are cautioned that the terms of the Obatan offer could be varied and the cash consideration offered could decrease.
In addition, the SEC has indicated that "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."
Should Obatan’s offer pique investor interest, CSA and SEC recommended that they carefully review the offer documents and consult with an investment advisor to better consider all options.
