SO they are locking you into a $2.88 price, basically at their option, not yours.
In other words, if you tender you are giving Main Street an illiquid OTC option to buy your shares.
Giving, without consideration, what you could sell for a price on the CBOE, etc., and have more flexible terms (including, e.g., the right to later terminate the option by buying it back at its then market price).
Silly and offensive, although they are counting on some people being dumb enough to fall for it.
There used to be a nasty little game like this, in which the scamsters would make a tender offer for some small percentage of a small company's stock, at a price 30% or so BELOW market. (Anyone who really cares could find some discussion of one such scheme on the LGND board maybe 3-4 years ago.)
Why would anyone tender? No one with any sense, but apparently a few small shareholders would get the pages of legalese headed "Tender Offer" and "We offer to buy . . . ", and would pack up their certificates and send them off without checking the price. And the scamsters paid what they'd promised to pay, immediately resold in the market at a 30% or whatever profit, and went on to the next game.
Stupid; but one thinks of P.T. Barnum. The game apparently worked well enough that there were a fair number of these.
I think I remember that the SEC stamped this out, maybe 3-4 years ago, with a new reg or a ruling. (My guess is that this one is designed to skate around that SEC ruling.)
--RCM |
