Goodyear is the latest in a string of public companies-including Cooper Tire & Rubber Co. in 2001-to receive an unsolicited ``mini-tender'' offer by TRC Capital Corp. to purchase shares of its common stock.
The tire maker said June 25 it learned of the Toronto-based investment group's offer to purchase up to 5 million shares of its common stock, or about 3 percent of Goodyear's total outstanding shares, for $19.50 per share.
Goodyear's stock price closed at $18.75 per share on June 26, the lowest closing share price since Oct. 31.
While the company expressed no opinion on the offer, it advised its shareholders to use ``extreme caution'' and consult with their financial advisers before considering the offer. Mini-tenders are not subject to many of the disclosure, filing and procedural protection requirements of the Securities and Exchange Commission, and are often structured to obtain shares at below market prices, Goodyear said.
The SEC Internet site says mini-tender offers-those for less than 5 percent of a company's stock-``have been increasingly used to catch investors off-guard.'' Some SEC rules not applying to mini-tender offers include requirements to disclose bidder information and offer terms, file documents with the SEC and provide the target company and any competing bidders with information about the offer.
Mini-tender offers are fairly common in the public company sector, with about 30-40 total made per month, a Goodyear spokesman said.