Talen Energy Corp - $TLNE tender offer
Actionable at $TLNE below ~ $112 USD per share
1. Tender overview
On 29 May 2024, Talen Energy Corporation (OTCQX: TLNE) announced that it has commenced a modified "Dutch auction" tender offer to purchase for cash up to an aggregate purchase price of $600,000,000 (and, at the Company's option, up to an additional $12,000,000) of its common stock at a price per share not less than $116.00 and not greater than $122.00, less any applicable withholding taxes and without interest, using available cash on hand.
Talen Energy Corp tender offer will have an odd lot provision as described in the Offer to Purchase.
“The Tender Offer will expire at 5:00 PM, New York City time, on June 27, 2024 (the "Expiration Time"), unless extended or earlier terminated. In order for stockholders to be eligible to receive the Total Consideration, such holders must validly tender their Shares at or prior to 5:00 PM, New York City time, on June 12, 2024, unless extended by Talen in its sole discretion (such time and date, as the same may be extended, the "Early Tender Time").”
2. Trade details
At the moment of this writing, $TLNE trades at around 115.49 USD per share. As a rule of thumb, I would not touch the situation if it makes at least 100 bucks per trade or 3% on the invested capital (time can vary - usually over 3 to 4 weeks).
So, these are the steps to exploit the potential market fluctuations in the next few days:
Step one - put out a Good-To-Date (ending cob 25 June 2024) Limit order (LMT in Interactive Brokers, i.e. an order to buy shares at a specified price or better) for 99 shares of Talen Energy Corp (ticker TLNE) at 112 USD (i.e. below 116 USD) per share. If your order is filled, it will require you to pay 11,089 USD.
Step two - tender your 99 shares at below 112 USD per share by 25 June 2024 via your broker (highly recommend Interactive Brokers)
Step three - get (116-paid price) USD * 99 shares - 1 USD profit on your Interactive Brokers account.
3. Nuances and risks
Note that $TLNE is listed on OTC Markets (Pink Sheets) as opposed to a well-known reputable exchange and is not reporting to the SEC. Hence, the risk of the change of tender conditions, such as change in the price range or deadline extension, are higher than with plain vanilla odd lot tender offers.
Do your own due diligence.