September 15, 2022 - 5:39pm EST by
2022 2023
Price: 8.21 EPS 0 0
Shares Out. (in M): 857 P/E 0 0
Market Cap (in $M): 7,483 P/FCF 0 0
Net Debt (in $M): 9,932 EBIT 0 0
TEV (in $M): 17,415 TEV/EBIT 0 0

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  • Odd-Lot Tender
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Interesting fixed price tender from ADT with two ways to play it:

A. PA odd-lot trade of 99 shares.  No proration or price risk so it's clearly in the cheeseburger category but an easy one to pick up with a de minimis amount of capital.  Buy 99 shares and tender before October 20th.  

B. Opposite side but wanted to flag it's worth thinking about an outright short if shares approach $9.  Why might this decline?

Apollo owns 67% of ADT and this tender is being set up to provide liquidity for Apollo.  Apollo has agreed to tender at least 133,333,333 shares (100% of the amount of the tender).  They don't state exactly how much they're going to tender but given the fixed price, they'll presumably tender 100% of their shares in order to increase the total number of their shares that are accepted.  Looking at registry, AllianceBernstein, Ariel, and Miller Value have been selling recently.  The three of them cumulatively own ~5% of the company and if they all tender, that would result in ~20% of tendered shares being accepted.  I wouldn't expect Apollo to dump shares after that but potentially you end up with others selling those returned shares and therefore downward pressure on the price. 


At a minimum, the r/r seems asymmetric since there's no real upside scenario where ADT could acquire more shares on the cheap.


I do not hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise hold a material investment in the issuer's securities.


October 20th tender expiration

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