Tender offer is a corporate finance term denoting a type of takeover bid. The tender offer is a public, open offer or invitation (usually announced in a newspaper advertisement) by a prospective acquirer to all stockholders of a publicly traded corporation (the target corporation) to tender their stock for sale at a specified price during a specified time, subject to the tendering of a minimum and maximum number of shares. In a tender offer, the bidder contacts shareholders directly; the directors of the company may or may not have endorsed the tender offer proposal.
To induce the shareholders of the target company to sell, the acquirer's offer price usually includes a premium over the current market price of the target company's shares. For example, if a target corporation's stock were trading at $10 per share, an acquirer might offer $11.50 per share to shareholders on the condition that 51% of shareholders agree. Cash or securities may be offered to the target company's shareholders, although a tender offer in which securities are offered as consideration is generally referred to as an "exchange offer."
Famous quotes containing the words tender and/or offer:
“When the ground was partially bare of snow, and a few warm days had dried its surface somewhat, it was pleasant to compare the first tender signs of the infant year just peeping forth with the stately beauty of the withered vegetation which had withstood the winter ... decent weeds, at least, which widowed Nature wears.”
—Henry David Thoreau (1817–1862)
“Sometimes my wife complains that she’s overwhelmed with work and just can’t take one of the kids, for example, to a piano lesson. I’ll offer to do it for her, and then she’ll say, “No, I’ll do it.” We have to negotiate how much I trespass into that mother role—it’s not given up easily.”
—Anonymous Father. As quoted in Women and Their Fathers, by Victoria Secunda, ch. 3 (1992)