Manulife says it has been notified of an unsolicited mini-tender offer made by Obatan LLC to purchase up to 500,000 Manulife common shares, or approximately 0.026% of the common shares outstanding, at a price of USD$13.00 per share.
“Manulife is in no way associated with Obatan and does not recommend or endorse acceptance of this unsolicited offer,” stated the insurer in a press release issued March 18.
Offer well below current market price
Manulife is cautioning shareholders that the mini-tender offer has been made at a price below the current market price for Manulife shares.
“The offer represents a discount of 38.53% and 38.56%, respectively, below the closing prices of Manulife common shares on the TSX and NYSE on March 5, 2021, the last trading day before the mini-tender offer was commenced, and a discount of 39.94% and 40.20%, respectively, below the closing prices on the TSX and NYSE on March 17, 2021,” says the company.
Regulators have serious concerns about mini-tender offers
The insurer adds that both the Canadian Securities Administrators (CSA) and the U.S. Securities and Exchange Commission (SEC) have expressed serious concerns about mini-tender offers, including the possibility that investors might tender to such offers without understanding the offer price relative to the actual market price of their securities.
In its press release, Manulife quoted the SEC which states that "bidders make mini-tender 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."
Manulife adds that shareholders “should carefully review the Obatan offer documents and current market price for Manulife shares, and consult their investment advisors regarding any offer they may receive and review with their advisors all options for their investment in Manulife shares.”