Here's a no-risk way to play the TSFT dutch tender offer:
Buy an odd lot of 99 shares.
Holders of odd lots will get priority over all other
shareholders. Judging from the form SC-TO that was filed
with the SEC, it appears to me that regardless of any
oversubscription of the deal, holders of 99 shares or less
will stand in line first, and provided that they made the
minimum offer of $7, they will definitely get at least $7 of
cash.
The stock is presently trading at an ask of 6 1/8. If you
buy 99 shares at 6 1/8, and pay a comission of $20, then
receive $7 in March, you will net $107. And you
could possibly get an additional $50, if the deal goes through at
the maximum $7.50.
Well, $107 isn't a big deal, I know, but I've now bought
99 shares in 3 different brokerage accounts, so that
makes it a little more worthwhile.
I don't see how this can go wrong. I get an 18% net gain in
approximately one month, with no risk that I can see.
Here's the info from the form SC-TO:
In what order will tendered shares be purchased? Will
tendered shares be
prorated? (See Section 5.).......... . First, Telesoft will purchase shares
from all holders of "odd lots" of
less than 100 shares (not including
any shares attributable to individual
accounts under the Telesoft Corp.
Profit Sharing Plan) who properly
tender all of their shares at or
below the selected purchase price;
and
. Second, after purchasing all shares
from the "odd lot holders," Telesoft
will then purchase shares from all
other stockholders who properly
tender shares at or below the
selected purchase price, on a pro
rata basis, subject to the
conditional tender provisions
described in Section 6. |
