Canadian Firm Seeks 2.3% Stake in Gap

Gap Inc. said TRC Capital Corp. of Canada had begun an unsolicited “mini-tender” offer to buy as many as 20 million Gap shares, a stake of about 2.3% in the nation’s largest specialty apparel retailer.

San Francisco-based Gap said it does not recommend or endorse TRC’s offer.

The offering price is $12 a share, a 5% discount to Gap’s New York Stock Exchange closing price of $12.60 Tuesday, the day before TRC began its offer. Shares of Gap on Thursday closed off 45 cents at $12.14, before the company’s announcement.

Tender offers avoid many disclosure and procedural requirements of federal regulators by seeking less than 5% of a company’s stock.

According to the Securities and Exchange Commission’s Web site, mini-tenders “have been increasingly used to catch investors off guard.” Many investors “may end up selling their securities at below-market prices,” the SEC said.