Bank cautions shareholders over stock purchase offer
The Bank of N.T. Butterfield & Son Limited has issued a warning to shareholders with regard to the offer by New York Stock and Bond LLC to purchase up to 50,000 of Butterfield’s ordinary shares, or approximately 0.1 per cent of shares outstanding, at a price of $21.00 per share.
Butterfield cautions shareholders that the unsolicited mini-tender offer has been made at a price below the current market price for Butterfield shares.
The bank said that the offer represented a discount of approximately 34 per cent below the closing price on the NYSE on Thursday July 14, 2022.
The statement said: “Butterfield does not recommend or endorse acceptance of this unsolicited mini-tender offer and is not associated in any way with New York Stock and Bond LLC, its mini-tender offer or the offer documentation.
“Mini-tender offers are designed to seek not more than 5 per cent of a company's outstanding shares, thereby avoiding disclosure and procedural requirements applicable to most bids under US securities regulations.
“The US Securities and Exchange Commission has expressed 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.”
The statement said that the SEC had cautioned investors about these offers, noting that “some 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”.
The SEC's guidance to investors on mini-tenders is available at https://www.sec.gov/rules/interp/34-43069.htm.
Butterfield advised: “Shareholders should carefully review the offer documentation, obtain current market quotations for their shares, consult with their broker or financial adviser, and exercise caution with respect to New York Stock and Bond LLC’s mini-tender offer. Butterfield requests that a copy of this news release be included with all distributions of materials related to New York Stock and Bond LLC’s mini-tender offer for Butterfield's ordinary shares.”