Palo Alto Networks urged shareholders to reject Tutanota LLC’s $450-per-share offer, warning that a pricing condition could leave sellers below the market price and extensions could delay payment.
Tutanota is seeking up to 250,000 shares, about 0.03% of Palo Alto Networks’ outstanding common stock, for $450 in cash per share. Palo Alto Networks said a provision makes the offer contingent on its stock closing above $450 on the final trading day before expiration. If that condition is met and Tutanota does not waive it, holders who tender could be paid below the market price, the company said.
The Securities and Exchange Commission (SEC) uses “mini-tender” for offers seeking less than 5% of a company’s shares. The agency says these offers generally face fewer filing, disclosure and procedural rules than larger tender offers, although Section 14(e) and Regulation 14E still apply. It advises investors to compare an offer price with current market prices and review the terms.
Palo Alto Networks said shareholders who have already tendered may withdraw before expiration by following the procedure in Tutanota’s offer documents. The company said it does not endorse the offer and is not affiliated with Tutanota.
The offer is scheduled to expire at 5 p.m. ET Monday, Nov. 2, unless extended. Tutanota may extend it for successive periods of 45 to 180 days, which Palo Alto Networks said could delay payment beyond the scheduled expiration.
