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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments
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To: xcr600 who wrote (11628)10/13/1999 8:56:00 AM
From: Arcane Lore  Read Replies (2) of 18998
 
... why in the world would they want to own a million shares of NAVR, especially at $10? ...

This is just my opinion of course but I doubt they want to own them for very long. Note the first clause in the mini-tender offer:

1. Purchaser expressly reserves the right, in its sole discretion, to purchase as many Shares (up to 1,100,000) or as few Shares as it deems advisable, and to select which tendered shares it accepts or rejects regardless of the date tendered.

IMO if NAVR is priced below the tender price of $10.25 at the time of completion of the tender, they will not purchase any of the tendered shares (why would they if they can purchase shares in the open market for less than $10.25 - assuming the price is enough less than $10.25 to cover commissions). If NAVR is priced higher than $10.25, they will IMO purchase as many shares as they can immediately flip into the market at prices sufficiently above $10.25 to cover commissions and other expenses (they can also wait for a better price if they like - see below). In particular, I doubt that they are making a long term investment in NAVR.

The following clauses in the mini-tender offer make it even more advantageous to Growth Capital Corporation:

4. Tenders of Shares made pursuant to the Offer are irrevocable even
in the event that the offer is extended.

5. Purchaser expressly reserves the right, in its sole discretion, to extend
the expiration of the offer under these same terms and conditions.

In other words, if Growth Capital Corp doesn't like NAVR's price on 10/15, they can simply wait until it reaches a more satisfactory level.

In summary IMO it looks like a "heads I win, tails you lose" proposition for Growth Capital Corp.
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