Markets
PG

Procter & Gamble Urges Shareholders to Reject Mini-Tender Offer

Shares of The Procter & Gamble Company (NYSE: PG) are barely break-even for the year, but that's no reason investors should accept a lower price for them. That's why the consumer products giant is urging shareholders to reject an unsolicited mini-tender offer by Mason Bell, which is looking to acquire 10,000 shares of the stock at a discount.

Procter & Gamble says the investor is offering to buy its stock for $106 per share, more than 12% below the $120 per share its stock was selling at on July 2, the last trading day prior to when the offer was made. Shares closed out last week at over $125 a share, 18% above the buyer's offer.

Man handing over hundreds of dollars

Image source: Getty Images.

Risky business

Why would someone sell at a lower price? Mini-tender offers try to catch novice investors off guard. Many have likely heard of tender offers, such as when one company wants to acquire the other and tenders an offer to buy the stock, though it's usually at a premium. Mini-tender offers are different, and while they're not illegal, even the SEC says to be wary of them.

In a mini-tender offer, the buyer is looking looking to acquire less than 5% of a company, which means the offers are largely unregulated. So long as Mason Bell doesn't lie, protections investors have with regular tender offers do not exist with mini-tenders. For example, investors with traditional tender offers can change their mind about selling, but with a mini-tender there is no do-over.

Mason Bell's goal of 10,000 shares is significantly short of that 5% mark; P&G has 2.5 billion shares outstanding.

Mason Bell is likely just trying to make a quick buck, and both new and seasoned investors would do well to follow Procter & Gamble's suggestion and ignore the offer.

10 stocks we like better than Procter & Gamble
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Procter & Gamble wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of June 2, 2020

 

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

PG

Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More