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That Letter Offering to Buy Your Stock? Think Twice.


One other company, Tutanota, has made a spate of mini-tender offers since last summer, soliciting shareholders of firms including PayPal, Adobe, Disney, Microsoft, Alibaba and Bank of America.

Its offer for PayPal was $125 per share — so long as the stock was trading above that price on the last day of the offer period. The offer also noted that Tutanota expected to increase the offer several times, “until the market price exceeds the offer price,” and that the offer was depending on Tutanota’s “obtaining all financing crucial” to fund it.

PayPal, whose stock closed at $102 on Thursday, advised shareholders in a Feb. 25 statement to reject the offer. “PayPal doesn’t endorse Tutanota’s unsolicited mini-tender offer and isn’t affiliated or associated in any way with Tutanota, its mini-tender offer or its mini-tender offer documents,” it said.

Tutanota, which describes itself as “a non-public investment company that makes a speciality of investing in publicly traded securities whose value it expects to understand over a 12-month period,” couldn’t be reached for comment. Nobody responded to an email address provided within the offer, or to messages left at a phone number that was answered by a recording.

(A spokeswoman for Tutao, a German company that gives a secure email service called Tutanota, said in an email that it had “no affiliation with Tutanota L.L.C. in anyway.”)

Firms may be in a clumsy position when shareholders receive mini-tender offers. In response to the S.E.C., firms must notify their shareholders of tender offers once they turn into aware of them. But because bidders in mini-tender offers aren’t required to notify the goal, the businesses may not find out about them.

Listed here are some questions and answers about mini-tender offers:

Bidders generally don’t label their offers as mini-tenders, perhaps due to their dubious fame. The S.E.C. advises reading the offering document fastidiously and checking with the bidder or your broker or financial adviser, if you’ve got one. If the bidder is looking for lower than 5 percent of the corporate’s shares, the S.E.C. says, “you’re coping with a mini-tender offer, and you need to proceed with caution.”

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