Odd lot tenders

[NeverLoseMoney]

Has anyone been following the GNL tender or the APLE Tender? 

 

http://finance.yahoo.com/news/global-net-lease-announces-tender-100000869.html

http://finance.yahoo.com/news/apple-hospitality-reit-inc-begins-201500792.html

 

I am in both of these.  For those of us who use Interactive Brokers, it doesn't appear they are available in their system.  I think something might be wrong with IB's system right now, because I did receive two notifications of corporate actions on these names from IB - but both were listed as "pending mergers", not tenders.  Is anyone else having similar trouble with IB?  If so, please call in and complain to IB so they realize this is not an isolated incident.

 

Separately, does anyone know why these tenders often happen immediately after the company IPOs?  It seems odd to me that they would list and then isssue a tender concurrently.  The only reason I can think of is that it is a price-support mechanism.

I always get a "pending merger" notification for tender offers. After this initial message a second notification usually shows up in a few days where I can actually allocate my shares to the tender offer. So I think it is normal for this to take a little while. The names of the notifications are confusing currently.

 

No idea about the reason for the IPOs and concurrent tenders by the way.

[constructive]

Separately, does anyone know why these tenders often happen immediately after the company IPOs?  It seems odd to me that they would list and then issue a tender concurrently.  The only reason I can think of is that it is a price-support mechanism.

 

Maybe their investment bankers are running a special sale. Buy an IPO, get an odd lot tender for free.

[Haasje]

With my broker the process to tender shares is not automatic. They are execution only. Sometimes they notify me of the offer and sometimes not. The one time they did, I had one day to let them know whether I wanted to accept.

 

Now they put my odd lot of 99 shares in under what they refer to as "best-effort" basis. That means it got treated just like a block of 10k shares.

 

Is it my responsibility to instruct them how to fill out the form or should they have asked me for instructions or should they have filled it out correctly anyway?

 

 

 

[bizaro86]

Has anyone been following the GNL tender or the APLE Tender? 

 

http://finance.yahoo.com/news/global-net-lease-announces-tender-100000869.html

http://finance.yahoo.com/news/apple-hospitality-reit-inc-begins-201500792.html

 

I am in both of these.  For those of us who use Interactive Brokers, it doesn't appear they are available in their system.  I think something might be wrong with IB's system right now, because I did receive two notifications of corporate actions on these names from IB - but both were listed as "pending mergers", not tenders.  Is anyone else having similar trouble with IB?  If so, please call in and complain to IB so they realize this is not an isolated incident. 

 

Separately, does anyone know why these tenders often happen immediately after the company IPOs?  It seems odd to me that they would list and then isssue a tender concurrently.  The only reason I can think of is that it is a price-support mechanism.

 

I'm in both of these. IB usually takes a few days to get things up, if it doesn't show up by the end of the week I'll call in.

 

The reason they happen right after IPO is that these are private REITs that are going public to give liquidity to the pre-IPO shareholders. So there is a mass of people who haven't been able to sell since they bought (or were sold...) this investment from their broker. The tender acts as a price support mechanism in two ways, by anchoring expectations for existing owners to get them to hold on, and by adding demand for the shares from arbs.

[watsa_is_a_randian_hero]

Everyone is saying "it usually takes a couple days" - I am aware of this, I've done others with IB before.

 

My concern is its been 3 weeks since APLE was announced.  I've been in it for about 2.5 weeks now.  It has not showed up.  I have called Ib and opened web tickets and up until today kept saying the line "waiting on DTC, it will show up as soon as they process".  Today I pointed out that this is happening with both APLE and GNL, and they finally admitted that was unusual to take this long and they would check to see if there was a problem with their programmers.

 

Separately, it just took me over 4 weeks to change my IRA beneficiaries because of a "programming glitch" among other problems, and also it took me about 3 weeks to have a trust account application approved because of a "compliance review". 

 

I have used IB since 2007 but things seem to be moving slowly and slipping through the cracks over there lately. 

[wachtwoord]

Everyone is saying "it usually takes a couple days" - I am aware of this, I've done others with IB before.

 

My concern is its been 3 weeks since APLE was announced.  I've been in it for about 2.5 weeks now.  It has not showed up.  I have called Ib and opened web tickets and up until today kept saying the line "waiting on DTC, it will show up as soon as they process".  Today I pointed out that this is happening with both APLE and GNL, and they finally admitted that was unusual to take this long and they would check to see if there was a problem with their programmers.

 

Separately, it just took me over 4 weeks to change my IRA beneficiaries because of a "programming glitch" among other problems, and also it took me about 3 weeks to have a trust account application approved because of a "compliance review". 

 

I have used IB since 2007 but things seem to be moving slowly and slipping through the cracks over there lately.

 

They took over 2 months (and several requests by me to get it done as it blocks changing your trading permissions) to review my re-affirmation of my personal detail. Now it's 'impossible' to expand my trading permissions to include Canada without changing my investment goals to speculation and trading profits because apparently it's impossible to deselect penny stocks due to a software limitation.

 

I never really had any issues with them before so maybe this is all a coincidence.

 

Anyway, thanks for the suggestions. I'm in both as well now. Hopefully I will be able to allocate the shares before the end of the week as I will be traveling.

[netnet]

Has anyone been following the GNL tender or the APLE Tender? 

 

http://finance.yahoo.com/news/global-net-lease-announces-tender-100000869.html

http://finance.yahoo.com/news/apple-hospitality-reit-inc-begins-201500792.html

 

I am in both of these.  For those of us who use Interactive Brokers, it doesn't appear they are available in their system.  I think something might be wrong with IB's system right now, because I did receive two notifications of corporate actions on these names from IB - but both were listed as "pending mergers", not tenders.  Is anyone else having similar trouble with IB?  If so, please call in and complain to IB so they realize this is not an isolated incident. 

 

Separately, does anyone know why these tenders often happen immediately after the company IPOs?  It seems odd to me that they would list and then isssue a tender concurrently.  The only reason I can think of is that it is a price-support mechanism.

 

Aren't both of these regular, as opposed to odd lot tenders or is the theory that the all of the odd lot tenders will be filled?

[wachtwoord]

They are both odd lots. Check the filings @Edgar.

[bizaro86]

I sent in a ticket to IB on APLE and SNC, and got a response that they're aware of it and waiting for management direction.

[watsa_is_a_randian_hero]

Those responses are BS...there is clearly a problem on IB's end.

 

The allocation for APLE is now available in their corporate actions tool, but they set it up wrong.  They set it up as though it were at a specified price; This is a tender with a range, and there is nowhere to submit your price level.

[matjone]

It would be interesting to hear from someone who did this arb somewhere else.  I decided not to do APLE because their insiders were fined a few years ago for disclosure violations.  It probably doesn't matter for these purposes, but after getting burned on AOBI I started being more careful with these.

[wachtwoord]

Those responses are BS...there is clearly a problem on IB's end.

 

The allocation for APLE is now available in their corporate actions tool, but they set it up wrong.  They set it up as though it were at a specified price; This is a tender with a range, and there is nowhere to submit your price level.

 

And another ticket. I'm not sure what's going on at IB ...

 

PS: Recently when I received partial shares for a spin-off they also automatically sold the partial part of my shares @ <1% of market value. I complained and received my money back (and it was <$10) but still.

[wachtwoord]

For the record: both tenders are working fine now at IB.

[TimeIsValue]

Hi,

 

I was wondering if anyone has a good system for finding new odd lot opportunities? I am currently using links to some specific SEC filings. But I have to click on all of the links every time I want to check if there are new opportunities.

 

Do you know of a RSS feed or some other automatic method that can be set up to receive all new odd lot opportunities that is not part of a paid newsletter?

 

Thanks,

 

M.

 

 

[matjone]

go here http://www.sec.gov/cgi-bin/browse-edgar?action=getcurrent

 

type in the filing you want and set up an RSS for it.

[Okta]

go here http://www.sec.gov/cgi-bin/browse-edgar?action=getcurrent

type in the filing you want and set up an RSS for it.

 

This does work for filing type. Is there also a way to combine rss with full text search? For example I search by hand for in form type:SC TO with search for text: odd lot. I see no way to get this search by rss. Additionally you can set up some google alerts.

 

For the rss feeds I use the free version of feedly and have experienced it to be somewhat delayed, but sufficient for my purposes.

[IntrinsicEdge]

This might help for your "odd lot" searches/alerts.  The following site let's you set up text searches of SEC documents and email you when it finds a match. 

 

SEC Search Site :  http://www.secdatabase.com/

 

[oplia]

For "odd lot" searches I recommended using my services ;)

At http://www.specialsituationinvestments.com/category/odd-lot-tender-offers/

I am collecting all the info for you for a symbolic fee, so you will not need to track these on daily basis.

[watsa_is_a_randian_hero]

For the record: both tenders are working fine now at IB.

 

Yeah I'm on it.  thx

[Haasje]

Hi guys, maybe a weird question but did you receive your cash for the KCG Holdings tender offer (if you participated)? My broker is claiming it did not receive the cash from clearing yet but I do not trust them anymore due to past experiences. KCG announced final tender results on June 9. It seems an awful long time to wait for cash.

 

 

 

 

[IntrinsicEdge]

Hi guys, maybe a weird question but did you receive your cash for the KCG Holdings tender offer (if you participated)? My broker is claiming it did not receive the cash from clearing yet but I do not trust them anymore due to past experiences. KCG announced final tender results on June 9. It seems an awful long time to wait for cash.

 

Held shares at two different brokers and both deposited the cash on June 9th.

[Haasje]

@IntrinsicEdge, thank you for confirming. I have come to realize my broker is unable to handle odd lot tenders and I am in the process of opening other accounts.

 

New problem:

 

Meanwhile, that same broker is now claiming it is correct to withold a dividend tax on the tender payout of APLE shares? They are claiming this is correct because under section 302 of the IRS revenue code a payout by the way of tender offer is considered taxable the same way as a dividend payment.

 

I do not think this is correct? What would you tell your broker here?

 

 

 

 

 

 

 

[wachtwoord]

@IntrinsicEdge, thank you for confirming. I have come to realize my broker is unable to handle odd lot tenders and I am in the process of opening other accounts.

 

New problem:

 

Meanwhile, that same broker is now claiming it is correct to withold a dividend tax on the tender payout of APLE shares? They are claiming this is correct because under section 302 of the IRS revenue code a payout by the way of tender offer is considered taxable the same way as a dividend payment.

 

I do not think this is correct? What would you tell your broker here?

 

I really doubt that's correct. But you are Dutch right? Just subtract is from your box 3 taxes like with all dividend tax.

[rijk]

just read the tax section, this clearly states that if you meet one of the three section 302 criteria, which you most likely do, the transaction represents a sale that triggers capital gain tax, for which you are exempt if you file the applicable tax form, and not a dividend distribution

 

if you can't provide the required tax form, the broker most likely does need to withhold tax

 

just curious, which broker is this?

 

regards

rijk

 

Generally. A sale of Shares pursuant to the Offer will generally constitute a “redemption” under the Code and will be a taxable transaction for federal income tax purposes. If the redemption qualifies as a sale of Shares by a U.S. shareholder under Section 302 of the Code, the U.S. shareholder will recognize gain or loss equal to the difference between (i) the cash received pursuant to the Offer and (ii) the U.S. shareholder’s adjusted tax basis in the Shares surrendered pursuant to the Offer. If the redemption does not qualify as a sale of Shares under Section 302 of the Code, the U.S. shareholder will not be treated as having sold Shares but will be treated as having received a distribution from us in an amount up to the amount of the cash received pursuant to the Offer. If a U.S. shareholder is treated as receiving a distribution from us, the cash received will generally be taken into account as an ordinary income dividend to the extent of our current or accumulated earnings and profits, unless we designate the dividend as a capital gain dividend.

 

As described below, whether a redemption qualifies for sale treatment will depend largely on the total number of the U.S. shareholder’s Shares (including any Shares constructively owned by the U.S. shareholder) that are purchased in the Offer and any Shares acquired or disposed of in a transaction that, for federal income tax purposes, is integrated with the Offer.

 

http://www.sec.gov/Archives/edgar/data/1418121/000118518515001346/ex99-a1a.htm

 

[Haasje]

@IntrinsicEdge, thank you for confirming. I have come to realize my broker is unable to handle odd lot tenders and I am in the process of opening other accounts.

 

New problem:

 

Meanwhile, that same broker is now claiming it is correct to withold a dividend tax on the tender payout of APLE shares? They are claiming this is correct because under section 302 of the IRS revenue code a payout by the way of tender offer is considered taxable the same way as a dividend payment.

 

I do not think this is correct? What would you tell your broker here?

 

I really doubt that's correct. But you are Dutch right? Just subtract is from your box 3 taxes like with all dividend tax.

 

@Yes Dutch. I will, but it is still very annoying.

 

@Rijk. Thank you. These were done with DeGiro. I also have a Binck account and setting up IB. I have inquired with Alex and I know they are unable to execute odd lot tenders. Do you have any solid recommendations for brokers?