Concerns about where the remaining 85% of Home Depot shares would trade after its own tender could also be to blame, says Deborah Weinswig. The Citigroup analyst thinks this negative reaction is irrational. While raising the prospect of Home Depot restructuring its own tender offer, she thinks it is unlikely.
Ms. Weinswig points to comments from a member of Citigroup’s Risk Arbitrage Team, who says even if the shares fall 10%, a restructuring is highly unlikely since “it could discredit the company and portray management as having little confidence in the stock price.”
Home Depot’s tender offer expires on August 16.
