A tender offer represents a public solicitation to all shareholders to tender their shares for sale at a specified price during a fixed period. This method is commonly used in corporate acquisitions, providing a direct route to gain control of a target company.
Understanding Tender Offers: Complete Guide to Corporate Acquisitions
A comprehensive resource for investors and financial professionals on tender offers, their implications, and strategic considerations in corporate finance.
What is a Tender Offer?
Types of Tender Offers
Cash Tender Offer
Shareholders receive cash payment for their shares at a fixed price, typically at a premium to the current market price.
Exchange Tender Offer
Shareholders receive securities (stocks, bonds, or other instruments) of the acquiring company in exchange for their shares.
Two-Tier Tender Offer
A two-phase acquisition where the first tier offers better terms than the second tier to encourage quick acceptance.
Tender Offer Process
- Initial Announcement & Filing
Company files Schedule TO with SEC, declaring intention to purchase shares.
- Offer Period
Typically 20 business days where shareholders can tender their shares.
- Price Premium Determination
Usually 20-30% above current market price based on various factors.
- Regulatory Review
SEC and antitrust authorities review the proposed transaction.
- Completion or Extension
Offer concludes if minimum shares are tendered, or extends if necessary.
Tender Offer Premium Calculator
Recent Tender Offer Activity
Frequently Asked Questions
What happens if I don't tender my shares?
If you choose not to tender your shares during the offer period, the outcome depends on the offer's success. If the acquirer gains control, remaining shareholders might be forced to sell in a subsequent merger, potentially at less favorable terms.
How long do I have to decide?
The initial tender offer period must remain open for at least 20 business days. Extensions are common if the minimum share threshold isn't met or regulatory approvals are pending.
Can a tender offer be withdrawn?
Yes, tender offers can be withdrawn under certain circumstances, such as failure to obtain regulatory approval or if conditions specified in the offer aren't met.
Additional Resources
SEC Guidelines
Official SEC documentation on tender offer rules and regulations.
View GuidelinesHistorical Data
Comprehensive database of past tender offers and their outcomes.
Access Database