TBC Begins Tender Offer for Midas Shares - Tire Review Magazine

TBC Begins Tender Offer for Midas Shares

Even as lawyers for at least four firms continue to troll for angry Midas shareholders looking to challenge the company’s self-sale, TBC Corp. has started its tender offer for Midas stock to complete its purchase of the auto service and tire chain.

TBC’s tender offer is for all of the outstanding shares of common stock of Midas at a price of $11.50 per share, net to the seller in cash without interest. The tender offer is being conducted by TBC through its wholly owned subsidiary Gearshift Merger Corp.
On March 13, TBC announced that it was buying out the international chain of company-owned and franchised retail service and tire centers. The estimated $310 million deal will technically “merge” Midas with Gearshift Merger Corp. The purchase price includes the assumption of $137 million in debt and pension liabilities.

TBC said the tender offer will last until April 24, unless the offer period is extended or terminated early, TBC said.

Sumitomo Corp.-owned TBC already operates 752 NTB, Tire Kingdom and Merchant’s Tire retail tire and service stores in the U.S., and has 456 franchised Big O Tire locations. In addition, TBC is the second largest U.S. wholesaler and independent importer through its TBC Brands, TBC International, National Tire Warehouse, Carroll Tire and Treadways operations.

With the Midas business in its portfolio, TBC would add more than 2,250 franchised, licensed and company-owned Midas shops in 14 countries, including nearly 1,500 in the U.S. and Canada. In addition, Midas also owns the SpeeDee Oil Change business, with 161 centers in the U.S. and Mexico.

Meanwhile, at least one Midas shareholder has filed suit against the Midas board of directors in an effort to stop the sale. According to the complaint, the unnamed plaintiff “alleges that the defendants breached their fiduciary duties” in attempting to sell Midas “at an unfair price via an unfair process.”

Further, the shareholder – represented by the so-called “Shareholders Foundation” based in San Diego – claimed that J.P. Morgan Securities, hired by Midas to advise it on its financial options, did not provide "disinterested" advice as it was also employed by TBC and stood to gain in a merger or purchase agreement between the two.

At least three other law firms are actively advertising to attract Midas shareholders unhappy with the terms of the purchase deal in hopes of launching multi-million lawsuits.

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