Copart Makes a Tender Offer

CopartIt’s official – Copart (CPRT) has made a tender offer. The company is offering to purchase up to 8.1% of its stock at a price between $38 and $41 per share. With the stock now at $39.66, there’s no chance of a risk-free profit here, however, and the spread has quickly narrowed even at the top end. So those investors looking for a quick buck and who didn’t already on the stock, they’re probably out of luck. But the tender offer does have my favorite provision for small shareholders, the odd lot provision.

That is, there is an odd lot priority for up to 99 shares, so investors could take a flyer on the stock and hope that they can make a quick hundred dollars or so, by putting in an ask price of about a dollar higher, at $41 per share. However, they risk not selling their shares in the offer. That’s not really my style, and I’d prefer something that was nearly risk-free, as in a traditional tender offer at a fixed price. (In fact, I’ve found a “take private” situation that offers investors approximately $750 in profit over the next few weeks with limited downside. Just enter your email in the box of the top of the page and I’ll send you a special free report on it.)

No directors or officers of the company are participating in the tender offer, and that’s generally a good sign for the long-term outlook on the business. Of course, a tender offer itself is usually a good sign that management is looking to create shareholder value.

Copart will pay for the tender offer with cash on hand. It should have no problem affording the purchase even if the maximum number of shares were tendered. The offer expires on December 23, 2015 unless extended. You can read further details at this SEC filing, and you can see all the recent tender offers on this page.

Tender offers are great, low-risk money, but they are pretty rare, usually just 2-3 per year are actionable. Fortunately right now, (until early December) we have an excellent “take private” in process that can earn you several hundred dollars (nearly $750, as of November 1). Sign up for our special free report in the lower right pop-up box or the bar at the top of the screen. I’ll send you a special free report with all the details.

 

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