Insperity (NSP) joins the ranks of the many companies participating in a tender offer. The company is offering to purchase up to $125 million of its stock, or between 10.3% and 11.8% of its outstanding shares, depending on the purchase price. It’s offering to buy at a price between $43.50 and $50 per share, a relatively wide bid range. With the stock now at $46.20 and bouncing on the news, there’s no chance of a risk-free profit here, however. So those investors looking for a quick buck and who didn’t already on the stock, there’s less chance of a risk-free profit here. 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 than their buy price. 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 $830 in profit over the next week 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. Activist investor Starboard, which owns 13.7% of the stock, is also not participating in the tender offer, another good sign.
Insperity will pay for the tender offer with cash on hand, more than $210 million, and a credit facility with $125 million in capacity. So it should have no problem affording the purchase even if the maximum number of shares were tendered. The offer expires on January 7, 2016 unless extended. You can read further details at this SEC filing, and you can see all the recent tender offers on this page.