Dominion Energy shareholders receive mini-tender offer

TRC Capital seeks less than 5% of shares for below-market price

Published October 2, 2023 by Katherine Schulte

Dominion Energy is urging its shareholders to reject a “mini-tender” offer from TRC Capital Investment, the Richmond-based Fortune 500 utility announced Monday.

Toronto-based investment firm TRC Capital offered to purchase up to 2 million shares of Dominion Energy’s common stock for $44 per share in cash, approximately 4.47% below the closing price of Dominion common stock on Sept. 26, which was the last trading day before the unsolicited offer.

Mini-tenders are offers for less than 5% of a company’s outstanding shares. Because these offers are below the 5% threshold, Securities and Exchange Commission tender offer regulations do not apply.

According to the SEC, “some 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. Others make mini-tender offers at a premium – betting that the market price will rise before the offer closes and then extending the offer until it does or improperly canceling if it doesn’t.”

This is not TRC Capital’s first mini-tender offer to Dominion. In January 2016, the firm offered to purchase up to 2 million shares at $66.50 per share in cash, approximately 4.19% below the closing price of the trading day before the offer. Dominion also recommended shareholders reject that offer.

TRC Capital’s offer currently closes at 12:01 a.m. EST on Oct. 27, but the company can extend it if it chooses. Shareholders who tendered their shares can withdraw them before the offer expires through written notice.

TRC Capital made a slate of mini-tender offers, including an offer for up to 1 million Moderna common stock shares, in early September, according to TRC news releases. The firm offered $107.56 per share, approximately 4.44% lower than the closing price of common stock in Moderna, the Cambridge, Massachusetts-based maker of a COVID-19 vaccine, on Sept. 1, the last trading day before the offer. On Sept. 29, the firm decreased its offer price to $99 per share.

On Aug. 2, TRC Capital made a mini-tender offer to buy up to 3 million shares of Verizon Communications common stock at $31.95 per share, about 4.4% below the closing price of the stock on Aug. 1.

In May, TRC Capital terminated its offer to buy up to 1 million shares of Canadian fertilizer company Nutrien and returned tendered shares to their holders. Conditions in its offer, made April 5, were not met, according to a news release, including the market price it stipulated shares needed to hit during the offer period.

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