Series 24: Tender Offers

Tender Offers

When a party would like to acquire another company without going through the expense and time that other types of acquisitions require, they may extend a tender offer. A tender offer is an open offer to purchase a large percentage of a company’s outstanding shares from the company’s current shareholders. In a tender offer, the acquiring party offers shareholders a price above the market price of the shares (a premium), and shareholders can choose to tender their shares or not. Tender offers are often contingent on shareholders “tendering” a minimum number of shares, usually a majority or supermajority. The party that is extending the tender offer is usually seeking some