Thursday, March 20, 2014

Tender Offer / Management buy back - Global Sources Limited (Bermuda)

Global Sources Limited (NASDAQ: GSOL)

If you want to make hundred dollars on a ~$400 investment in 2 months almost risk free, read further.

Tender offers usually provide an odd lot provision, which is a priority to buyback less than 100 shares in any shareholders account. The company Global Sources Limited didn't specify this in the SEC filings or in the buyback offer announcement. But, I believe they had something like this as they had done a similar transaction (buy back) in 2010, where they considered 50 shares ownership as an Odd lot.

So, the opportunity is to buy 50 shares of Global Sources Limited (NASDAQ: GSOL), and ask your broker to tender all the shares in the management share buyback @ $10/share. Currently the shares are trading at @ $8.00, you pocket the difference between (10-8)*50, less brokerage costs. Tender offer completes at the end of May 2014. 

You can even do this in multiple brokerage accounts to leverage this idea to enhance your returns on your total invested capital. Here is the announcement of this tender offer.

https://www.sec.gov/Archives/edgar/data/1110650/000095016214000015/ex99_1.htm

Feel free to send this to anyone who may like to benefit from this idea. Let me know if you have any questions.

Disclosure: I own shares of Global Sources Limited.

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