oplia Posted December 30, 2015 Share Posted December 30, 2015 Alstom announce tender to buy 29% of shares at 35eur. The stock is currently trading at 28eur, so a potential for 25% upside in a month for the shares that do not get prorated. The deal seems to be closed for US investors, however I am not sure if the company is able to check it if one tenders through brokerage. Documentation in English http://www.alstom.com/investors/share-buyback/documents/ http://www.alstom.com/Global/Group/Resources/Documents/Investors%20document/Opra/ALSTOM___Traduction_note_d_OPRA_VD.pdf?epslanguage=en-GB I still have couple of unanswered questions regarding this. Maybe someone on the forum already had experience with French tenders? - Tax treatment for foreign residents. There no of this in the tender document, but I have heard that French authorities treat tender similar to dividends and might put withholding tax on it. Even more interesting, is that this withholding tax might be slapped on the difference between tender price and BV (instead of tender price and purchase price). An explanation of such tax treatment for another French company is here http://www.bouygues.com/wp-content/uploads/2011/11/tax_opra_uk-.pdf. - How does the proration works in this case? Tender docs specify that proration will be not based on the shares tender, but rather on the all the shares owned (see 'Reduction mechanism'), however I can not figure out how this actually works out mathematically. Link to comment Share on other sites More sharing options...
Hielko Posted December 30, 2015 Share Posted December 30, 2015 Looks like a potential interesting special situation, but taxes could indeed be a problem. Hope someone here can shine some light on that. Link to comment Share on other sites More sharing options...
ap1234 Posted December 31, 2015 Share Posted December 31, 2015 Thanks for an interesting idea oplia! I haven't followed the situation. Does anyone have a sense for why there is such a large spread between the current stock price and the tender offer? It seems like an unusually large discount even if the tender is prorated. Link to comment Share on other sites More sharing options...
oplia Posted December 31, 2015 Author Share Posted December 31, 2015 I agree, seems like there should be a reason for the discount. And I think taxes might be it - taxes seem to be even higher for France residents. Also ALO is due to announce results in mid Jan and maybe some investors are worried about those. Link to comment Share on other sites More sharing options...
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