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NEW YORK -- Hess Corp., the Mid-Atlantic oil company that operates or licenses approximately 700 Hess and Hess Express convenience stores, has recommended that its shareholders reject a so-called "mini-tender offer" from TRC Capital Corp. for up to 2 million shares of Hess common stock, or about 0.6 percent of the company’s total outstanding common stock.
According to the company, TRC's unsolicited offer of $61 per share was more than 4 percent below the closing price of Hess stock on May 12, the day before the offer was commenced. The closing price on May 14 was $59.89. Hess also noted the offer is subject to numerous conditions, such as the receipt of financing by TRC and there being no decrease whatsoever in the trading price of Hess common stock.
TRC Capital, based in Alberta, Canada, describes itself on its Web site as a business consulting firm that guides companies through "the maze of preparation, to maximizing the company’s value, to negotiating differences between the offer and the seller’s goals, to closing the deal."
According to Hess, TRC has made similar offers for the shares of other companies. These offers are devised to seek less than 5 percent of a company's outstanding shares, thereby avoiding many procedural and disclosure requirements of the Securities and Exchange Commission (SEC) because they are below the SEC's threshold to provide such disclosure and procedural protections for investors, Hess claimed. The SEC has issued an investor alert regarding "mini-tender offers," noting that in making the offers at below-market prices, "bidders are hoping that they will catch investors off-guard if the investors do not compare the offer price to the current market price."
Hess noted that it does not in any way endorse the TRC Capital Corp. offer and is in no way associated with TRC Capital Corp., the offer or the offer documentation.
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