Another odd-lot tender has appeared, and this one gets interesting almost immediately.
Computer Modelling Group Ltd. (TSX: CMG) is offering to repurchase up to C$20 million of its own shares through a modified Dutch auction. The tender range is C$4.00 to C$4.50 per share, while CMG closed Friday, September 11 at C$3.80.
Even better for our purposes, shareholders who own fewer than 100 shares and properly tender them are exempt from proration.
That gives us the basic ingredients we look for in an odd-lot tender opportunity: a small position, preferential treatment for odd lots and a potential spread between the market price and what the company is willing to pay.
And unlike some of the opportunities we have been following, the bottom of this tender range is already above the stock’s latest market price.
The Computer Modelling Group Tender Offer
Computer Modelling Group is a Calgary-based software and consulting company serving the energy industry. On August 14, the company formally launched a substantial issuer bid to repurchase up to C$20 million of common stock.
The offer uses a modified Dutch auction. Shareholders can tender shares at one of the specified prices between C$4.00 and C$4.50, in C$0.10 increments, or make a purchase-price tender and agree to accept whatever final purchase price the auction produces.
The offer is scheduled to expire September 21, 2026, unless CMG extends, varies or withdraws it.
You can read CMG’s official announcement of the tender here.
The Part We Care About: Odd Lots Are Exempt From Proration
Suppose too many shareholders tender stock at or below the final purchase price. Normally, CMG would have to prorate the shares it accepts.
But CMG specifically provides an exception for shareholders holding fewer than 100 shares. Qualifying odd-lot holders are not subject to that proration.
That is why 99 shares can be more interesting than 100.
If you own 100 or more shares, you are generally in the ordinary pool with everyone else. If you qualify as an odd-lot holder and properly tender 99 shares, the proration problem may disappear.
As always, the details matter. Anyone actually participating should read the issuer bid circular and their broker’s corporate-action instructions rather than relying solely on a press release — or on this article.
Our Starting Price: C$3.80
CMG closed at C$3.80 on Friday, September 11. Since we identified the opportunity over the weekend, I am using that closing price as the starting point for our paper portfolio.
A hypothetical purchase of 99 shares would therefore cost:
99 × C$3.80 = C$376.20
Now compare that with the possible tender prices.
| Tender Price | Proceeds on 99 Shares | Gross Profit | Gross Return |
|---|---|---|---|
| C$4.00 | C$396.00 | C$19.80 | 5.3% |
| C$4.10 | C$405.90 | C$29.70 | 7.9% |
| C$4.20 | C$415.80 | C$39.60 | 10.5% |
| C$4.30 | C$425.70 | C$49.50 | 13.2% |
| C$4.40 | C$435.60 | C$59.40 | 15.8% |
| C$4.50 | C$445.50 | C$69.30 | 18.4% |
That is what makes CMG stand out.
At our C$3.80 reference price, the stock does not need the auction to clear near the top of the range for the trade to work on a gross basis. Even the C$4.00 floor would produce a 5.3% gain before taxes, commissions, currency conversion and other costs.
How the Modified Dutch Auction Works
There is an important distinction between the minimum tender price and the price CMG will actually pay.
CMG will look at the shares tendered and determine the lowest single purchase price between C$4.00 and C$4.50 that allows it to buy the shares contemplated by the offer, subject to the C$20 million limit and the other terms of the tender.
Shareholders who tender at or below that final price and whose shares are accepted receive the same final purchase price.
So someone who tenders at C$4.00 does not necessarily receive only C$4.00. If the auction clears at C$4.30, accepted shares tendered at C$4.00 also receive C$4.30.
The tradeoff is straightforward. Tendering at a higher minimum price potentially increases the price you demand, but also increases the chance that the final auction price comes in below your tender and your shares are not purchased.
A purchase-price tender avoids choosing a minimum price, but for purposes of determining the auction price CMG treats those shares as though they were tendered at C$4.00.
So What’s the Catch?
Unfortunately, Canadian odd-lot tenders have already taught us that a nice-looking spread is only the beginning of the analysis.
The first complication is taxes.
When a Canadian corporation repurchases its own shares, Canadian tax rules can potentially treat a portion of the payment as a deemed dividend rather than simply as sale proceeds. That can be particularly important for a non-Canadian shareholder because Canadian withholding tax may apply.
The exact result depends on the terms of the offer, the company’s tax paid-up capital, the shareholder’s circumstances and applicable treaty treatment. Broker handling can matter as well.
In other words, I would not look at the 5.3% minimum gross spread and automatically assume that 5.3% lands in your pocket.
Before participating, I would want to read the Canadian federal income-tax section of CMG’s issuer bid circular and understand exactly how my broker intends to process the transaction.
Currency and Fees Matter More on a 99-Share Trade
There is another familiar odd-lot problem: the position is intentionally small.
Ninety-nine shares at C$3.80 cost only C$376.20. That is part of the appeal, but it also means fixed costs can eat a surprisingly large percentage of the profit.
If your broker charges a corporate-action fee, a foreign-trading commission, an unfavorable currency-conversion spread or some combination of the three, a C$19.80 gross profit at the bottom of the range can shrink quickly.
The economics become much more forgiving if the tender clears toward C$4.30 or C$4.50. But we do not know the final purchase price yet.
There Is Also Ordinary Market Risk
The tender itself does not put a C$4.00 floor under the stock for everyone.
If you buy CMG and then fail to tender properly, miss your broker’s earlier deadline, turn out not to qualify for odd-lot treatment, or otherwise do not have your shares purchased, you still own CMG stock.
The market price can go down.
That matters because the issuer bid is partly a response to weakness in the shares. CMG itself said when launching the offer that it believes the stock is trading at a meaningful discount to intrinsic value. That is management’s opinion, not a guarantee about where the shares will trade after the tender.
Our CMG Paper Trade
For purposes of the experiment, we are adding Computer Modelling Group to our odd-lot paper portfolio.
Security: Computer Modelling Group Ltd. (TSX: CMG)
Reference date: September 11, 2026 close
Reference price: C$3.80
Hypothetical shares: 99
Hypothetical cost: C$376.20
Tender range: C$4.00–C$4.50
Scheduled expiration: September 21, 2026
Odd-lot provision: Holders of fewer than 100 shares are exempt from proration under the stated terms of the offer
When the tender is completed, we will come back and calculate what actually happened: the final purchase price, whether the 99 shares would have been accepted, the gross return and whatever tax, withholding, currency and fee effects we can reasonably determine.
Is the CMG Odd-Lot Tender Worth Watching?
Yes.
Of the odd-lot tenders we have examined recently, CMG has one particularly attractive feature: the entire stated tender range is above the market price we are using for our hypothetical entry.
That does not make the trade risk-free. Canadian tax treatment may be crucial. Fees matter enormously on a position this small. The stock can move before you buy it, and the final tender price is unknown.
But a potential 5.3% to 18.4% gross return on a 99-share position, combined with explicit odd-lot protection from proration, is precisely the sort of slightly inelegant corner of the market that makes these situations interesting.
We are tracking several other current situations in our September 2026 odd-lot tender roundup, and we will publish the results as each tender is completed.