"ChaPaVe Partners" is the name, but what's its game?
This morning, this previously unheard of firm announced a "tactical tender offer" for 1.5 million shares of Travelzoo
That's a curious comment from an analyst that recommends buying Travelzoo stock up to $60 -- but I think Benchmark is on the mark. As the analyst points out, Travelzoo's supposed acquirer only created a company website two weeks ago. Prior to that, ChaPaVe was apparently a nonentity. More importantly, its "offer" may not be much of an offer at all.
According to the terms of its press release, ChaPaVe "plans to commence" its tender offer "subject to certain conditions." Right off the bat, this tells us the offer isn't in effect yet. As for the conditions, they're vague:
- "We encourage all 150 institutional investor shareholders to add to their holdings in order to reduce the number of shareholders as part of our tactical strategy." (So what happens if all 150 institutional shareholders don't play ball?)
- "ChaPaVe will meet with Travelzoo's management and board of directors in order to complete due diligence." (Travelzoo's response: "We have not had any contact with this company and cannot comment.")
- "Another condition is that ChaPaVe obtains a financing commitment no later than October 18th, 2011, subject to possible extension." (And if it doesn't, the firm would have no commitment to buy anything, much less pay $6 more than Travelzoo's current share price.)
- "ChaPaVe may choose not to move ahead ..."
ChaPeVe's supposed offer isn't quite as shareholder-unfriendly as the "mini-tenders" that Canada's TRC Capital has run in the past, trying to buy shares of name-brand firms like Pfizer
Just don't expect anything to come of their "offer."
What's the next step in this alleged attempt to buy Travelzoo? Add the stock to your Fool watchlist, and find out.
Fool contributor Rich Smith does not own (or short) shares of any company named above. The Motley Fool has a disclosure policy. The Motley Fool owns shares of Abbott Laboratories. Motley Fool newsletter services have recommended buying shares of Abbott Laboratories, Pfizer, and Travelzoo. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.