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:
“Farewell? a long farewell to all my greatness.
This is the state of man; today he puts forth
The tender leaves of hopes, tomorrow blossoms,
And bears his blushing honors thick upon him:
The third day comes a frost, a killing frost,
And when he thinks, good easy man, full surely
His greatness is a-ripening, nips his root,
And then he falls as I do.”
—William Shakespeare (1564–1616)
“Like children, the elders are a burden. But unlike children, they offer no hope or promise. They are a weight and an encumbrance and a mirror of our own mortality. It takes a person of great heart to see past this fact and to see the wisdom the elders have to offer, and so serve them out of gratitude for the life they have passed on to us.”
—Kent Nerburn (20th century)