HLIT - Harmonic

[walt373]

HLIT is doing a dutch auction tender offer with a range of 5.75-6.25 and it does have an odd lot provision. It expires on May 24. The current price is about 4.5% below the minimum, so assuming this goes through, potential return is 4.5%-12.5%. They are buying back 14% of shares, which is an OK amount, but not sure if it will work out if you do more than 99 shares.

 

But note that it has the "10% condition" which says they can cancel the offer if HLIT or the stock market falls 10%. Under conditions to the offer:

 

"No decrease in excess of 10% in the price of our common stock or in the Dow Jones Industrial Average, the New York Stock Exchange Composite Index, the NASDAQ Composite Index or the S&P 500 Composite Index shall have occurred during the Offer."

 

It sounds like any fall of 10% can trigger this, so you have to measure it from the highest price it's reached, which was around $6. So if it hits $5.40, they can cancel it.

 

Press release: http://www.harmonicinc.com/news/harmonic-announces-intent-repurchase-100-million-its-common-stock-through-modified-dutch

 

Tender offer filings: http://www.sec.gov/Archives/edgar/data/851310/000119312513175411/0001193125-13-175411-index.htm

[beerbaron]

Isn't it a 10% fall from the issue of the release?

 

BeerBaron

[infinitee00]

I think it's 10% from the day the offer was filed because the filing says

 

No decrease in excess of 10% in the price of our common stock or in the Dow Jones Industrial Average, the New York Stock Exchange Composite Index, the NASDAQ Composite Index or the S&P 500 Composite Index shall have occurred during the Offer.

 

So, I guess  the offer can get cancelled below a price of ~$5.13

[walt373]

My friend actually called them and they said it's a 10% fall from the high water mark, so around $6.