Johnson & Johnson Recommends Shareholders Reject “Mini-Tender” Offer by TRC Capital Investment Corporation

Rhea-AI Summary

Johnson & Johnson (JNJ) received an unsolicited mini-tender offer from TRC Capital Investment to purchase up to 1 million shares at $151.23 per share, 4.12% lower than the previous closing price. JNJ advises shareholders not to tender their shares due to the offer being below market price and subject to conditions.

Insights

Financial Analyst

The mini-tender offer by TRC Capital Investment Corporation to purchase shares of Johnson & Johnson below the market price is a strategic attempt to acquire equity at a discount. This practice can be contentious as it potentially preys on less informed investors. The offer is significantly below the current trading price, which suggests that TRC Capital is capitalizing on shareholders who might not be aware of the actual value of their shares or the implications of such an offer.

Investors should be wary of such offers, as they are not subject to the same stringent regulations as larger tender offers. This means less protection and more risk for shareholders. The critical factor here is the awareness and understanding of the market value of shares. For Johnson & Johnson, this offer could mean a slight dilution of its share value if many investors accept the bid, although the impact might be minimal given the small percentage of shares in question.

Securities Law Expert

Mini-tender offers like the one from TRC Capital Investment are notable for skirting the more rigorous disclosure and procedural requirements mandated by the SEC for larger tender offers. This lack of oversight can lead to less transparency and can disadvantage shareholders. The SEC's cautionary stance reflects the potential risks associated with these types of offers.

From a legal standpoint, Johnson & Johnson's proactive communication to its shareholders to reject the offer is a defensive measure to protect its shareholder's interests and uphold the integrity of its stock. It also serves to educate investors about the importance of staying informed and consulting with financial advisors when confronted with such offers.

Market Research Analyst

While the offer from TRC Capital Investment represents a negligible portion of Johnson & Johnson's outstanding shares, the company's response underscores the importance of shareholder education in equity markets. It is essential for shareholders to understand the value of their investments relative to market conditions.

Market trends indicate that mini-tender offers are often used as a tactic to catch shareholders off guard. Understanding the market dynamics and historical performance of Johnson & Johnson's stock could provide investors with a clearer perspective on the value proposition of such offers. Regular monitoring of share prices and staying informed about market news are best practices for shareholders to protect their investments.

NEW BRUNSWICK, N.J.--(BUSINESS WIRE)-- Johnson & Johnson (NYSE: JNJ) today announced that it has received notice of an unsolicited mini-tender offer by TRC Capital Investment Corporation of Ontario, Canada to purchase up to 1 million shares of Johnson & Johnson common stock at a price of $151.23 per share in cash. TRC Capital Investment’s offer price of $151.23 per share is approximately 4.12% lower than the $157.73 closing share price of Johnson & Johnson’s common stock on April 2, 2024, the business day prior to the date of the offer. The offer is for approximately 0.04% of the shares of Johnson & Johnson common stock outstanding as of the April 3, 2024 offer date.

Johnson & Johnson is not associated in any way with TRC Capital Investment or its unsolicited mini-tender offer and recommends that shareholders do not tender their shares in response to TRC Capital Investment’s offer because the offer is at a price below the current market price for Johnson & Johnson’s shares and subject to numerous conditions.

TRC Capital Investment’s has made many similar mini-tender offers for shares of other companies. Mini-tender offers seek to acquire less than 5 percent of a company’s shares outstanding, thereby avoiding many disclosure and procedural requirements of the U.S. Securities and Exchange Commission (SEC) that would otherwise apply. As a result, mini-tender offers do not provide investors with the same level of protections as provided for larger tender offers under U.S. securities laws.

The SEC has cautioned investors that some bidders making mini-tender offers at below-market prices are “hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price.” More on the SEC’s guidance to investors on mini-tender offers is available at www.sec.gov/investor/pubs/minitend.htm

Johnson & Johnson urges investors to obtain current market quotations for their shares, to consult with their broker or financial advisor and to exercise caution with respect to TRC Capital Investment’s offer. Johnson & Johnson recommends that shareholders who have not responded to TRC Capital Investment’s offer take no action. The offer is currently scheduled to expire at 12:01 a.m., New York City time, on May 2, 2024. TRC Capital Investment may extend the offering period at its discretion.

Johnson & Johnson encourages brokers and dealers, as well as other market participants, to review the SEC’s letter regarding broker-dealer mini-tender offer dissemination and disclosure at www.sec.gov/divisions/marketreg/minitenders/sia072401.htm

About Johnson & Johnson

At Johnson & Johnson, we believe health is everything. Our strength in healthcare innovation empowers us to build a world where complex diseases are prevented, treated, and cured, where treatments are smarter and less invasive, and solutions are personal. Through our expertise in Innovative Medicine and MedTech, we are uniquely positioned to innovate across the full spectrum of healthcare solutions today to deliver the breakthroughs of tomorrow, and profoundly impact health for humanity. Learn more at https://www.jnj.com/.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240404244958/en/

Media:

Tesia Williams

media-relations@its.jnj.com

Investors:

Jessica Moore

Investor-relations@its.jnj.com

Source: Johnson & Johnson

FAQ

What is the offer price for Johnson & Johnson's shares in the mini-tender offer by TRC Capital Investment?

The offer price is $151.23 per share, which is approximately 4.12% lower than the closing share price on April 2, 2024.

How many shares does TRC Capital Investment aim to purchase in the mini-tender offer?

TRC Capital Investment plans to buy up to 1 million shares of Johnson & Johnson's common stock.

What does Johnson & Johnson recommend to shareholders regarding the mini-tender offer?

JNJ advises shareholders not to tender their shares in response to TRC Capital Investment's offer due to the offer price being below the current market price.

What is the percentage of shares that the mini-tender offer represents of Johnson & Johnson's outstanding common stock?

The offer is for approximately 0.04% of the shares of Johnson & Johnson common stock outstanding as of the offer date.

When is the scheduled expiration date for TRC Capital Investment's mini-tender offer?

The offer is set to expire at 12:01 a.m., New York City time, on May 2, 2024, with a possibility of extension at TRC Capital Investment's discretion.