Following up on my previous post, I decided to give odd-lot tenders another try and bought 99 shares of WBMD at $50.70 last Thursday. WebMD Health currently has an odd-lot tender offer expiring September 8 to purchase properly tendered shares at $52. The company had previously made 3 other tender offers at $45.80, $46.80, and $50 since April of this year.
Unlike the previous tender offer I participated in for Fidelity National Services (FIS), WebMD’s price is already set and will not go through a Dutch auction process. However, there is also additional risk involved as a clause included in the tender offer specified that the tender offer may be amended, postponed or cancelled if “a decrease of more than 10% in the market price for the shares, the Dow Jones Industrial Average, the NASDAQ Composite Index or the S&P 500 Composite Index since the date of the Offer” occurs. This appears to be pretty standard verbiage in tender offers; however, since the tender offer was announced on August 10th, these indices have decreased 6-8% so far:
With September 8th being just around the corner, I’ll watch the stock closely and likely submit my decision to tender closer to the expiration date than I did for FIS. It will be interesting to see how this one turns out.
Update: WebMD Health waived the 10% market condition yesterday (August 30) referenced above in their latest update to their tender offer statement. Looks good so far!
Update 9/15/10: Received cash for this transaction, 99 shares @ $52 today. All’s well!