RICHMOND, Va. (AP) — Altria Group Inc., the parent of the Philip Morris USA tobacco empire, went on the offense after an investment company offered to buy 4 million of its shares — much less than 1 percent of its outstanding stock — at a below-market price.
Philip Morris Tobacco Company
Altria issued a statement Friday afternoon urging shareholders not to sell to TRC Capital Corp. On Thursday, the investment firm issued a “mini-tender offer,” an announcement from an investor interested in buying less than 5 percent of a company.
Such a small offer doesn’t trigger the same rules and shareholder protections as a bigger purchase. For example, the Securities and Exchange Commission doesn’t require a firm making a mini-tender offer to disclose the terms or file the offering documents.
It does not yet have a major stake in Altria, according to data from FactSet.
The 4 million shares Altria wants to buy amount to 0.2 percent of Altria’s common stock. TRC offered $26.75 per share, according to Altria. That’s a 4 percent discount from the stock’s $27.92 closing price on Wednesday.
Altria building in NYC
“Altria strongly urges investors to obtain current market quotes for their shares of common stock, consult with their financial advisors and exercise caution with respect to TRC’s offer,” Altria said in a news release Friday.
Some investors make mini-tender offers at below-market prices, hoping shareholders won’t check the current market price, according to the SEC.
TRC couldn’t be reached for comment. It has made numerous mini-tender offers for major companies in recent years, often at a discount.
The firm has reportedly made similar offers to shareholders of PepsiCo Inc. and Adobe Systems Inc. TRC also made a similar offer to shareholders of Philip Morris International in 2008.
