Global Sources Ltd. (GSOL) 17.5% return in ~2 weeks

Posted on March 25, 2014 by admin
  • *UPDATED 5/22/14*
  • Company: Global Sources Ltd.
  • Ticker: GSOL
  • Market Cap: $300mm
  • Size of Action: ~$50mm
  • Type of Transaction:  cash tender offer
  • Current Price: $8.51
  • Exchange Price: $10
  • Potential Gain (%): ~17.5%
  • Expiration: 12:00 Midnight May 28, 2014
  • Tender Limit (Shares): 99
  • Max Investment ($): $824
  • Max Gain ($): ~$103
  • Sec Filing: Link to PR
  • Summary: Global Sources Ltd. (NASDAQ: GSOL) intends to commence an issuer tender offer before the end of April 2014, with expected completion before the end of May 2014, for approximately 5 million shares, or approximately 14.4% of its outstanding common shares as of Feb. 28, 2014, at a purchase price of $10.00 per share in cash.  Global Sources expects to fund the tender offer with cash on hand.  As of Dec. 31, 2013, Global Sources had total cash, cash equivalents and available-for-sale securities of approximately $143.8 million.
  • Odd Lots: ...first, from all holders of “odd lots” of fewer than 100 Shares who properly tender all of their Shares and do not properly withdraw them before the Expiration Date....
  • Comments: GSOL put out a PR stating that they will be announcing a tender offer by the end of April 2014. We are speculating that this tender offer will have a odd-lot provision set at 50 shares (very unusual) similar to its last tender offer in 2010. More information to follow.
  • UPDATE 4/30/14: GSOL put out an official tender offer document. Price is up to $8.89 reducing the initial +20% upside to 12.5% but now the offer is solid and will close in less than one month. Odd-lot provision was set to 99 shares.  Link
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