NEW YORK — Bank of America Corp. urged its shareholders not to submit shares to an unsolicited tender offer from virtually unknown investment group IPIC Group Ltd., even though the offer is at a premium to recent market prices.
In a filing Tuesday, the nation's second biggest bank by assets, said the unsolicited mini tender offer for 500 million shares, or 4.86% of all shares, was unveiled late last month. The bank has had no contact with IPIC Group, a bank spokesman said.
If successful, the offer could make IPIC Group the biggest holder in the bank. State Street Global Advisors, which holds the stock in funds, currently is the top holder with 4.5% of shares outstanding.
A website for IPIC Group only touts the tender offer, saying IPIC Group is a "newly formed private investment firm organized in Delaware for the sole purpose of making the Offer."
The offer, at $6 a share, represents a 3.8% premium to Bank of America's closing price Tuesday and a 9.3% premium to the closing price on Nov. 21, the day before the group launched its offer.
The offer says it is outstanding until Dec. 23, though it will be extended until March 30 if it falls short.
A call placed to the group's number on its website was not immediately returned.
Bank of America's filing warns investors that the conditions of the tender offer could result in long lockups of shares, as the offer could fail but the group doesn't have to return shares until the end of March. The filing also warns of a "very unconventional" mechanism in the offer that would put the tendered shares in IPIC's name, giving the group all rights assigned to those shares, including any dividends and voting rights.
Bank of America shares have fallen 57% this year amid questions about exposures to mortgage problems, and continual doubt about its capital status because of the mortgage questions. The shares have risen in December, but fell a penny Tuesday after rising for much of the day. If shares had ended higher Tuesday, it would have been the stock's first five-day winning streak of the year.
