Subprime Blogger

Your Mortgage News Source

Non Mandatory Reorganization or Tender Offer for Bank of America?

Posted on | February 15, 2009 | 18 Comments

UPDATE: A tender offer is usually a premium of the current stock price as shown here on Wikipedia:

To induce the shareholders of the target company to sell, the acquirer’s offer price usually includes a premium over the current market price of the target company’s shares. For example, if a target corporation’s stock were trading at a value of $1/share, an acquirer might offer $1.15/share to its shareholders on the condition that 51% of shareholders agree. Cash or other securities may be offered to the target company’s shareholders as consideration, although a tender offer in which securities are offered as consideration is generally referred to as an “exchange offer.”

While this sounds great, it is likely that the premium will not be that lucrative.  Many of you have held this stock from much higher prices, so do not expect this tender offer to gain much of your losses back.  We will see how the stock reacts in the morning.  Stay posted to Subprime Blogger as we will keep you updated.

This morning Bank of America issued that statement that their stock is part of a mandatory reorganization or tender offer.  This is due to the purchase of Merrill Lynch, who subsequently has caused many problems for Bank of America.   A tender offer a “public, open offer (usually announced in a newspaper advertisement) by an acquirer to all stockholders of a publicly traded corporation to tender their stock for sale at a specified price during a specified time, subject to the tendering of a minimum and maximum number of shares. In tender offers, the bidder contacts shareholders directly, inviting them to sell their shares at an offer price.”

This question is, who is going to make this public offer for MANY of the Merrill Lynch shares that Bank of American currently holds?

Related Posts:

Category: Investing
Tags: >

Comments

18 Responses to “Non Mandatory Reorganization or Tender Offer for Bank of America?”

  1. Katy
    February 15th, 2009 @ 6:12 pm

    Is there any idea as to what this offer will be?

  2. davec
    February 15th, 2009 @ 9:59 pm

    It is always about money. Making it, stealing it, or avoiding taxes or a combination.

    I would not know the answer but it is too make more money that they are doing it.

  3. Non Mandatory Reorganization or Tender Offer for Bank of America? | No Brainer Profits
    February 15th, 2009 @ 10:12 pm

    [...] Read more: Non Mandatory Reorganization or Tender Offer for Bank of America? [...]

  4. Karin Robbins
    February 16th, 2009 @ 5:52 am

    What timeframe are we dealing with? Do we shareholders have a choice other than selling our shares at the designated price? Thanks, a BOA retiree.

  5. Sheri
    February 16th, 2009 @ 7:46 am

    As long as the offer price is at or above my perchase price. At least BOA should be loyal to their stockholders.

    Thanks,

    Sheri

  6. Dr. Robert Roddewig, PhD
    February 16th, 2009 @ 8:13 am

    This has been the very worst investment of my life. I would have ‘put my life’ on Bank Of America and, had I done so, I would not be writing this. Ken Lewis has been an egotistical ASS and has shown very little ability to run a company like BAC. I bought the stock primarily for safety and for income. Thanks to Lewis both have been effectively destroyed. MY SUGGESTION IS THAT LEWIS RESIGN AND RETIRE TO A FAR OFF ISLAND SOMEWHERE IN THE PACIFIC. Lewis is part of the problem we are having in this nation. Dr. Roddewig

  7. Chris
    February 16th, 2009 @ 8:27 am

    I guess the offer could be at $12.00?

  8. Greg
    February 16th, 2009 @ 9:08 am

    This is BAC’s way of satisfying the class actions against them for the Merrill purchase. The analyst reports on the stock have it valued at 8-18 range and doubling in the next 30 days. That being said, we have two choices…take the money and run, or wait and see if the stock does go up based on the offer. The time frame will be extended as the stock goes back up. However, if you are not sure, I’d bail at the offer. It will be a long time before we see true security with BAC and in the mean time the R/R is not good enough.

  9. John
    February 16th, 2009 @ 11:11 am

    I highly doubt it if they offer over 7-8 dollars a share. I do think we will get a chance to see this stock at $12-$14 in the next couple of months. Maybe then would be a good time to sell. I do have a strong position on BAC. I bought it at $4.20 when it sank. Hopefully it gets it’s act together and starts performing a little better. It will hover for a little while before going up. I say hold and be patient.

  10. Donna DuBris
    February 16th, 2009 @ 11:27 am

    I am also a former employee. I agree with the Dr. who says this has been a stinkeroo of an investment for me also. I have questions for those of you who know more about this type of thing. Have they determined the tender offer price or will they wait for the market to rally this stock and then set the price? How long will we all have to make a decision as what to do? When will we know what the price is? Thank you.

  11. admin
    February 16th, 2009 @ 2:49 pm

    It looks as if BAC is trying to buy out all the shareholders who have less than 99 shares. What do you know? BAC trying to get rid of the little buy and only let the big guys talk. That is what this company was built upon, so nothing has changed.

  12. Ken Grinder
    February 16th, 2009 @ 8:04 pm

    I guess this is one of those (you gotta know when to hold um or fold um). Since nobody knows, I’m going to take the money and run if the offer is reasonable.

  13. Greg
    February 17th, 2009 @ 8:16 am

    Here’s the scoop…the voluntary tender offer is for those people owning less than 99 shares. AND, it will be on a weighted average, I believe it will be weighted on your purchase price and NOT the avg price at market. Therefore, if you bought 10 shares at 10 and 10 shares at 5 you’ll get 7.50….

    I’m, for non-obvious reasons, becoming more bullish on BAC at least for now and have went long again today.

  14. ian
    February 24th, 2009 @ 7:21 am

    I own 2000 shares at 4 bucks and I got the same email. So I do not believe the less than 99 shares theory applies.

  15. David
    February 28th, 2009 @ 7:00 am

    Vert curious as to the amount of the offer. Any projections??

  16. David
    February 28th, 2009 @ 7:01 am

    Very curious as to the amount of the offer. Any projections??

  17. Dell
    March 12th, 2009 @ 2:15 pm

    I contacted Scottrade after they notified me by email. They verified the offer was for 99 shares and less, but did not say how much the shares were worth. When I found out I didn’t qualify I didn’t inquire about the price. I’m new to the stock market, but assumed this was bullish.

  18. amiesan
    March 18th, 2009 @ 12:08 pm

    This is an offer being made by “Latam Investments” and is in fact only an offer for those that own 99 shares or less. BAC is not trying to buy back shares. Because of its target (those who own a small amount of shares) they are not required to file with the SEC. I’m not an expert by any means, but read this article from Forbes and it may clear some minds: http://www.forbes.com/feeds/afx/2009/03/03/afx6121811.html

Leave a Reply





    • Subprime Blogger is Digg proof thanks to caching by WP Super Cache!