Cummins recommends rejection of below-market mini-tender offer

user-gravatar Headshot

Cummins Inc. recommended Dec. 17 that stockholders not tender their shares in response to an unsolicited mini-tender offer by TRC Capital Corp. of Toronto for TRC to purchase up to one million shares of Cummins’ stock at a price of $115.00 per share in cash.

The offer represents a 2.7 percent discount below Cummins’ closing price on Dec. 11, the day prior to the date of the offer, and a 6 percent discount below Cummins’ closing price on Dec. 14, the company said.

Cummins said it is in no way associated with TRC, the mini-tender offer or the offer documentation. Cummins said it does not endorse TRC’s unsolicited mini-tender offer and urged investors to obtain current market quotes on Cummins’ stock, consult with their financial advisers and exercise caution in examining the mini-tender offer, which represents less than 1 percent of the Cummins’ shares outstanding.

Cummins warned shareholders that the mini-tender offer is highly conditional; the conditions allow TRC to change the terms of its offer – such as the price offered per share – in the event of various occurrences, including a stock split. CMI announced a two-for-one stock split, effective Jan. 2, for shareholders of record on Dec. 21.

Cummins’ shareholders who have already tendered are advised that they may withdraw their shares by providing the written notice described in the TRC Capital offering documents prior to the expiration of the mini-tender offer, currently scheduled for Jan. 11 at 12:01 a.m. ET.