Tuesday, December 6, 2011

BofA to shareholders: Don't accept IPIC offer

Bank of America Corp. is urging stockholders to ignore a private investment firm's offer to buy as many as 500 million outstanding common shares, the bank said in a securities filing today.

The filing comes two weeks after Delaware-based IPIC Group Ltd. offered to buy the shares for $6 each in a deal that would make the group the Charlotte bank's largest institutional shareholder.

That represents a premium on Bank of America stock, which closed at $5.78 today, down a penny from the day before and down almost 60 percent for the year.

"Bank of America is not in any way associated with IPIC and recommends that stockholders do not tender their shares in response to this unsolicited mini-tender offer," the bank said in an 8K filed with the U.S. Securities and Exchange Commission.

It said the deal poses "significant risks" to shareholders. Mini-tender offers, which seek to buy less than 5 percent of a company's stock directly from current investors, aren't subject to the same federal disclosure and procedural requirements as other offers and therefore don't provide the same protection, the bank said.

IPIC said in a news release last month it would pay for the shares after its offer expires Dec. 23 - or, if fewer than 500 million shares are tendered by then, March 30. That means shareholders who agree to sell might lose control of their shares for several months and be unable to sell at a higher market price if the stock rises, Bank of America wrote.

The investment firm, which did not ask the bank's board of directors to approve the deal, has also not disclosed its executive officers, promoters or other information, the bank's filing said. As a result, shareholders might have a hard time tracking down their shares if the firm doesn't return the shares or complete the purchase, the bank said.

"Bank of America strongly urges shareholders to obtain current market quotes for Bank of America common stock, consult with their financial advisors, review the conditions to the offer and exercise extreme caution in evaluating this unsolicited offer," the bank's filing said.