Walt Disney Co. is recommending shareholders reject a mini-tender offer by TRC Capital because the offer price is below its current stock price.
A mini-tender offer is an offer to buy less than 5 percent of a company's outstanding shares, which doesn't trigger the same prohibitions and shareholder protections that a larger offer would.
Disney said that TRC's offer is for about one tenth of 1 percent of its outstanding stock.
Toronto-based TRC is known for making below-market bids for an array of companies, including First Solar Inc., Sherwin-Williams, Intel Corp., Ford Motor Co. and Royal Philips Electronics.
TRC Capital Corp. offered to buy up to 2 million shares of Disney's common stock at $61 each. This is below Disney's Monday closing price of $66.83. Disney also noted that the offer is below its closing price of $64 on Oct. 8, which was the day before the offer was made.
Disney said that the offer is subject to certain conditions, including TRC's ability to finance the offer and the absence of any decline in the market price of Disney's stock from the price on the date the offer was made. Disney said that if the market price of its stock drops or TRC can't obtain financing, then TRC is allowed to terminate the offer and not buy any shares.
Disney's stock fell 34 cents to $66.49 in Tuesday morning trading. The stock has changed hands between $46.53 and $67.89 in the past 52 weeks.