I've made a decent return on Bridgepoint Education (NYSE:BPI) in the 18 months or so that my Special Situations portfolio has owned it. Now I'm back to take advantage of a recently announced special situation: a tender offer.

Anatomy of a special situation
Bridgepoint announced last week that it would conduct a tender offer for 10.25 million shares for $19.50 per share, or about $200 million. If fully subscribed, the tender would eliminate 18.8% of the company's share count. It's a serious commitment to return value to shareholders, including the long-suffering Warburg Pincus, which owns more than 60% of the education company.

I'm pleased that the company is undertaking the tender because it has so much cash. As I noted when I purchased shares for the third time, in July, "[w]ith few other likely uses for that cash, it should be returned to shareholders in some form or other. That could include buybacks, or a special dividend, and ideally would include some type of leveraged recap, as well. Issuing debt, and then getting that money to shareholders through buybacks or a special dividend, would show that management is serious about creating value."

Well, that's finally arrived, most probably because Warburg wants to extract some cash from an investment that has been beleaguered by a variety of issues, many of which have beset the industry as a whole. But it's time for me to take advantage.

Foolish bottom line
So my Special Situations portfolio is buying 600 shares of the stock. Together with the Bridgepoint stock that my portfolio already owns, I'll be tendering all the shares immediately as part of the offer.

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