In the last few months, major Canadian insurers have warned investors that mini-tenders sought to buy an investor’s stock significantly below market value.
Since November, Ocehan LLC has made unsolicited mini-tender offers for Manulife, Great-West Lifeco and Sun Life shares at about 20% below market value.
None of the insurers endorse or recommend the offers.
A mini-tender offer is a widely distributed offer to purchase a relatively small number of securities of a public company. While the offers look like take-over bids, it is not subject to the same regulations, according to the Ontario Securities Commmission’s (OSC) website.
Bidders try aim to acquire fewer than 5% of a company’s outstanding shares to avoid disclosure and procedural requirements applicable to most bids under Canadian and U.S. securities regulations, Manulife said in a release.
Those making the offers hope to catch investors off guard if the investors don’t compare the offer price to the current market price, according the U.S. Securities and Exchange Commission (SEC).
This isn’t the first time mini-tender offers have been made for Canadian insurers. Bidders like New York Stock and Bond LLC and Obatan LLC have made offers between 28% and 39% below market value between 2022 and 2024.
Shareholders should get current market quotes for their chares and consult with their broker or financial advisors before considering the offers, Great-West Lifeco said in a release.