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OpenText Recommends Shareholders Reject TRC Capital "Mini-Tender" Offer
Thursday 12 October 2017

12 October 2017 - Canadian enterprise information management software specialist Open Text Corp. (NASDAQ: OTEX) (TSX: OTEX) has been notified of an unsolicited mini-tender offer made by Canadian investment firm TRC Capital Corp. to purchase up to 3m OpenText common shares, or approximately 1.13% of the company's outstanding common shares, at a price of CDN 38.50 per share, the company said.
OpenText is cautioning shareholders that the mini-tender offer has been made at a price below the market price for OpenText shares. 
The offer represents a discount of 4.44% to the TSX closing price and 4.67% to the NASDAQ closing price for OpenText common shares on October 3, 2017, the last trading day before the mini-tender offer was commenced.
According to TRC Capital's offer documents, OpenText shareholders who deposit their shares in acceptance of the offer may withdraw their shares at any time before 12: 01 am ET on November 3, 2017 by following the procedures described in the offer documents.
Mini-tender offers are designed to acquire less than 5% of a company's outstanding shares, thereby avoiding disclosure and procedural requirements applicable to most bids under Canadian and US securities regulations.
The Canadian Securities Administrators and the US Securities and Exchange Commission have expressed serious 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 SEC states that "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."
Any shareholder considering tendering to the offer should consult their financial adviser.
TRC Capital has made similar unsolicited mini-tender offers for shares of numerous other public companies.
Date Published: 12/10/2017
Target: Open Text/3m shares
Country: Canada
Deal Size: 930,000 (USD)
Sector: Computer Software
Type: Stakebuilding
Financing: Cash
Status: Bidding
Vendor: Open Text shareholders
Buyer: TRC Capital Corp
Mini tender offer for lowball bid. Not surprisingly, Open Text recommends shareholders reject the offer