Kroger Advises Shareholders to Reject Unsolicited ‘Mini-Tender’ Offer

The Kroger Co. is advising shareholders to reject an unsolicited "mini-tender" offer by TRC Capital Corp. to purchase up to 4 million shares of its common stock – valued at approximately 0.44 percent of outstanding common shares – for $28.70 per share in cash, because the offer is at a price below the current market price and subject to numerous conditions.

The Cincinnati-based retailer said TRC’s offer is 4.24 percent below the closing price of its common shares as of April 13, which was the last trading day before the offer was made.

Mini-tender offers seek to acquire less than 5 percent of a company's outstanding shares.

In a statement, Kroger said it “does not endorse TRC Capital's unsolicited mini-tender offer and recommends that shareholders do not tender their shares because the offer is at a price below the current market price for Kroger's shares and subject to numerous conditions. Kroger is not associated with TRC Capital, its mini-tender offer or the mini-tender offer documentation.”

Consequently, Kroger said TRC Capital – which it notes has made many similar unsolicited mini-tender offers for shares of other public companies – “can avoid many disclosure and procedural requirements of U.S. Securities and Exchange Commission (SEC) rules that apply to offers for more than 5 percent of a company's shares outstanding.”

The SEC cautions investors that some mini-tender bidders’ offers are at below-market prices and “[hopes] that they will catch investors off-guard if the investors do not compare the offer price to the current market price."

Kroger further recommends that shareholders who have not responded to TRC Capital's offer take no action. Shareholders who have already tendered their shares may withdraw them at any time prior to 12:01 a.m. EST on May 16, according to TRC Capital's offering documents. TRC Capital may extend the offering period at its discretion.

The Kroger Co. operates 2,796 retail food stores under a variety of local banner names in 35 states and Washington, D.C.