TriNet Group, announced the preliminary results of its modified “Dutch auction” tender offer (the “Tender Offer”) to purchase for cash up to $250 million in value of its common stock (the “Common Stock”) at a price per share not less than $63.00 and not greater than $72.00, less any applicable withholding taxes and without interest, using available cash on hand. The Tender Offer expired at 12:00 midnight, New York City time, at the end of the day on December 6, 2022 (the “Expiration Date”). The Company’s largest stockholder, Atairos Group, Inc., did not participate in the Tender Offer.
Based on the preliminary count by Computershare Trust Company, N.A., the depositary for the Tender Offer (the “Depositary”), a total of 1,515,258 shares (including 711,978 shares that were tendered by notice of guaranteed delivery) of Common Stock were properly tendered and not properly withdrawn at or below the purchase price of $72.00 per share.
In accordance with the terms and conditions of the Tender Offer, and based on the preliminary count by the Depositary, the Company expects to acquire 1,515,258 shares at a price of $72.00 per share, for an aggregate cost of approximately $109.1 million, excluding fees and expenses relating to the Tender Offer. As the Company expects to accept for purchase all of the shares that were properly tendered and not properly withdrawn at or below the purchase price of $72.00 per share, there is no proration factor. These shares represent approximately 2.4% of the shares outstanding as of December 6, 2022.
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“We believe our shares are undervalued and that our Tender Offer gave our stockholders the option to obtain liquidity with respect to all or a portion of their shares by allowing them to either participate in the Tender Offer or to increase their respective percentage interest in TriNet by not participating,” said Burton M. Goldfield, president and chief executive officer at TriNet.
“We view the undersubscribed Tender Offer as clear evidence that stockholders share our belief that there is upside to our current valuation. We plan to continue to maintain appropriate capital levels, while deploying excess capital to our stockholders over time,” said Kelly Tuminelli, chief financial officer at TriNet.
The number of shares to be purchased is preliminary and subject to change. The preliminary information contained in this press release is subject to confirmation by the Depositary and assumes that all shares tendered through notice of guaranteed delivery will be delivered within two trading days of the Expiration Date. The final number of shares to be purchased will be announced following the expiration of the guaranteed delivery period and completion by the Depositary of the confirmation process. Payment for the shares accepted for purchase under the Tender Offer, and return of shares tendered and not purchased, will occur promptly thereafter.
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Based on the preliminary count by the Depositary, following the purchase of shares in the Tender Offer, approximately $255 million will remain available under the Company’s existing stock repurchase program. Pursuant to such program, the Company may, in the future, decide to purchase additional shares in open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, and/or in private transactions, in each case subject to applicable law. Any such repurchases may be on the same terms as, or on terms that are more or less favorable to the selling stockholders in those transactions, than the terms of the Tender Offer. Whether the Company makes additional repurchases will depend on many factors, including its business and financial performance, the business and market conditions at the time, including the price of the shares, and other factors the Company considers relevant.
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