But for odd lot tenders it is usually best to use a “no bid” tender which maximizes the chance of being tendered even if the prices change later.

First, thanks for posting my article and handling all of the comments. I’ve been on vacation for a week and am just getting caught up.

From my understanding of the Dutch Auction process, all shares will be cashed out at the same price. In these scenarios, I always tender my shares at the minimum and cross my fingers for a higher price within the range. By buying at a decent discount to the minimum bid, you are guaranteed at least some profit, with potential for much more.

For larger shareholders, proration is a real risk in these type of transactions, as usually there is decent demand to tender shares. Although absolute profits are small on a dollar basis, these type of transactions provide a very nice annualized return, and they occur frequently throughout the year.

Right now, I’m having a hard time finding undervalued companies in the traditional sense, so am very happy putting my money to work in these type of transactions.

It sure beats a savings account!
.-= asues´s last blog ..FIS Tender Offer – Special Situations Investing =-.

I tendered my shares today at the minimum bid of $29.

Didn’t know I had to set a price, but the broker person kept asking me what price I wanted to tender at.

Not sure myself whether I will get $29 while others get $30 or more.

Company has agreed to sell $600 million of 7.625% senior unsecured notes due 2017 and $500 million of 7.875% senior unsecured notes due 2020 (collectively, the “Notes”). The Notes will be guaranteed by certain subsidiaries of FIS. The offerings of the Notes are expected to close on July 16, 2010.

This is an intriguing offer. When do you have to purchase the shares buy in order to participate in this offering. And is it available to stockholders outside of the US. (I live in Canada) There doesn’t seem to be much downside risk at this point. What is the likelihood in your mind of the offering falling through? What are some potential risks here?

Rocky

I asked the same question to Adam. Here is what it says in the document.

This preference is not available to partial tenders or to beneficial or record holders of an aggregate of 100 or more Shares, even if these holders have separate accounts or share certificates representing fewer than 100 Shares.

Thanks for taking the time to comment with a good question.

ALL mergers, tenders, buyouts or any other special situation is dependent on financing. Those comments in the documents are just necessary as a precautionary statement. Not much to worry about in this case.

When your buy order has been processed and you hold the shares, you can call your broker any time before Aug3 (minus 3 days, just in case) to tender your shares.

No recommended time. It’s all the same. You won’t receive your money until it is announced that the dutch auction has been successfully completed.

This is my first time investing in a special situation. I have read through the documents filed on EDGAR, and this FIS deal sounds like a good deal.

But the one thing that concerned me was that FIS kept saying that this tender offer is contingent on getting the proper financing. This might be a dumb question or you might have answered this already but, has FIS already gained access to the 2.5 billion in financing?

Also I know right now the latest date for tendering is Aug. 3, but when can we can we first tender our shares? And is there a recommended time to tender, for example as late as possible? or does it not make any difference when we tender?

Sorry for for so many questions this is just my first time involved in a deal like this. Thanks in advance!
.-= Chris Murphy´s last blog ..How To Think Like Warren Buffet =-.

If more than $2.5 billion in aggregate value of shares (or such lesser amount as FIS may elect to purchase, subject to applicable law) are properly tendered and not properly withdrawn…

According to FIS’ statement, at least 25% of the float must validly tender for the company to execute the transaction. If that condition isn’t met, then you have to trust that the company will lower its target.

Once you buy 99 shares (no more than 99) you simply call your broker and tell them you want to “tender your FIS shares”. Then they will put you on hold, tell you the fee will be $20 or more and the order will be executed. The tender price cannot be lower than the one stated unless the financing goes bust, at which point you should immediately sell anyways.

If you hold 99 shares and no more, your shares will be tendered for certain. Only if you have more will there be a likelihood that your shares will not be tendered.