Great-West Lifeco is cautioning investors that it has been notified of an unsolicited mini-tender offer made by Obatan LLC to purchase up to 250,000 common shares of Lifeco and up to 100,000 Non-Cumulative First Preferred Shares, Series F of Lifeco.
In a May 18 statement, Lifeco said the unsolicited offer represents a discount of approximately 38.3% to the closing price of the common shares, and a discount of approximately 38.7% to the closing price of the Series F shares, on the TSX on May 4, 2021, the last trading day before the offer was commenced. The common shares and the Series F shares do not trade on a recognized stock exchange in the United States.
“Lifeco does not endorse Obatan's unsolicited offer, has no association with Obatan or its offer, and does not recommend acceptance of the offer. Obatan's offer has been made at prices below the current market prices for the shares,” said the company.
Lifeco explained that mini-tender offers such as Obatan's seek less than 5% of a class of outstanding shares and so avoid many of the investor protections like disclosure and procedural protections applicable to most bids under Canadian law.
“The U.S. Securities and Exchange Commission has noted that some bidders make these offers at below-market prices ‘hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price’,” explains Lifeco.