Kansas City Southern has received notice of an unsolicited “mini-tender” offer by Canadian outfit Titus Rockefeller LLC (a.k.a. TRC Capital Investment Corp.) to purchase up to 500,000 shares, or approximately 0.55%, of KCS’s outstanding common stock at a price of $285.00 per share in cash. KCS said it does not endorse the offer and recommends that its shareholders reject it and not tender their shares in response to it. TRC Capital has been cited in numerous documented cases of securities fraud (see below).
“As TRC Capital’s own offer document acknowledges, the offering price is approximately 2.47% below the closing price per share of KCS on April 30, 2021, the last trading day before the mini-tender offer was commenced” the company said. “KCS also recommends that any shareholders who have tendered shares to TRC Capital withdraw those shares by providing the written notice described in the offering documentation before the expiration of the offer, which is currently scheduled for 12:01 a.m.EDT on June 2, 2021. KCS is not associated with TRC Capital, its mini-tender offer or the mini-tender offer documentation.”
(Editor’s Note: Do not confuse TRC Capital Investment Corp./Titus Rockefeller LLC with TRC Capital Partners LLC. TRC Capital Partners, formerly The Redstone Companies, is a Houston-based, privately held development and investment firm. During the past 25 years, TRC has invested private and institutional capital in assets with an aggregate value of more than $1.4 billion. Titus Rockefeller LLC does not have a website.)
“TRC Capital has made similar unsolicited mini-tender offers for shares of other public companies,” KCS noted. “Mini-tender offers are designed to seek less than 5% of a company’s outstanding shares, thereby avoiding many investor protections, including the disclosure and procedural requirements, applicable to larger tender offers under United States securities laws. The U.S. Securities and Exchange Commission (SEC) has cautioned investors about mini-tender offers, noting that ‘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.’ The SEC has also published investor tips regarding these offers on its website at: http://www.sec.gov/investor/pubs/minitend.htm.
“KCS encourages brokers and dealers, as well as other market participants, to review the SEC’s letter regarding broker-dealer mini-tender offer dissemination and disclosures on the SEC’s website at: http://www.sec.gov/divisions/marketreg/minitenders/sia072401.htm. KCS urges investors to obtain current market quotations for their shares, consult with their brokers or financial advisors and exercise caution with respect to TRC Capital’s offer.”
Research conducted by Railway Age reveals that TRC Capital’s mini-tender offer stinks of securities fraud, and there is precedent, according to many sources. Among them: