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Canadian National tells shareholders to shun TRC Capital's 'mini-tender offer'

THE Canadian National Railway (CN) has been notified of an unsolicited mini-tender offer made by TRC Capital Corporation to purchase up to two million New York and Toronto-listed CN common shares, or 0.25 per cent of the common shares outstanding, at a price of US$70.38 per share in cash.

"CN does not endorse this unsolicited mini-tender offer and recommends that shareholders reject the offer and do not tender their shares in response to the offer," said a statement from the Montreal-based railway.

Shareholders were cautioned that the mini-tender offer has been made at a price below market, representing a discount of 4.39 per cent and 4.61 per cent, respectively, to the closing prices of CN common shares on the Toronto Stock Exchange and New York Stock Exchange on the last trading day before the mini-tender offer was commenced.

"CN is not associated with TRC Capital, its mini-tender offer or the mini-tender offer documentation. The TRC Capital mini-tender offer is also not related to CN's own previously announced plans to repurchase up to 28 million of its own shares by the end of 2015." said CN.

The Canadian Securities Administrators (CSA) have expressed serious concerns about the mini-tender offer based on possible misunderstanding about its terms,

The US Securities and Exchange Commission (SEC) has also published investor tips regarding mini-tender offers. "Some bidders make mini-tender offers at below-market prices, hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price," said an SEC website warning.

CN urges investors to obtain current market quotations for their shares, consult with their brokers or financial advisors and exercise caution with respect to TRC Capital's offer.