What is a tender offer?
Tender offers are attempts to secure outstanding shares of stock associated with a given company by means other than purchasing the shares on the open market. The tender offer usually involves approaching a current shareholder and making an offer for all or part of the held shares. In order to make the tender offer attractive, the purchase price is usually above current market value. The use of a tender offer is a common approach when an individual or entity is initiating a takeover bid. Takeover bids may be conducted for a number of reasons. There may be an interest in acquiring a profitable company and bringing it into a conglomeration as part of a growth strategy. At the same time, the takeover may be a way to gain control of the assets of the company with an eye toward systematically dismantling the operation and selling off the various assets individually for a profit. In order to make the tender offer attractive to current shareholders, the price offered per unit of stock is usua
If outsiders seek to make a takeover attempt, or tender offer for a public company, the SEC tender offer rules often apply. The filings require the person making the tender offer provide detailed information to the public and shareholders about the tender offer and the plans of the persons making the tender offer. The target company is also subject to provisions of the tender offer rules. The tender offer rules also set time limits for the tender offer and provide other protections to shareholders.
