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Scholastic Terminates Dutch Auction Tender Offer

Chris Lange

Published: January 21, 2016 10:55 am

Last Updated: January 13, 2020 2:46 pm

Scholastic Corp. (NASDAQ: SCHL) fell early in Thursday’s session following news that it is ending a tender offer. The company announced that it had terminated its offer to purchase up to $200 million of its common stock through a modified “Dutch Auction” tender offer.

As a result of this termination, no shares will be purchased in the offer and all shares previously tendered and not withdrawn will be promptly returned to tendering holders.

For some background: on December 28, 2015, Scholastic commenced a tender offer pursuant to which holders of shares of Scholastic common stock were invited to tender some or all of their shares at a price within the range of $37 to $40 per share, as would have enabled Scholastic to purchase for cash up to roughly 5.41 million shares of its common stock.

One of the conditions influencing the termination of the offering was that there shall not have occurred any decrease of more than 10% in the Dow Jones Industrial Average, the New York Stock Exchange Index, the Nasdaq Composite Index or the Standard & Poor’s 500 Composite Index measured from the close of trading on December 28, 2015, the day the tender offer commenced.

Under the terms of the tender offer, once such a decrease in any of the foregoing indices occurred at any time prior to the expiration of the tender offer, and regardless of whether subsequent changes in the relevant index brought the decline back up to less than 10%, Scholastic had the right to terminate the tender offer.

On January 13, 2016, the Nasdaq Composite Index had declined by more than 10% from the close of trading on December 28, 2015, triggering the failure of the condition.

Shares of Scholastic were trading down 13.6% at $32.48 on Thursday, with a consensus analyst price target of $50.00 and a 52-week trading range of $30.34 to $46.28.