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:
“And that is ... how they are. So terribly physically all over one another. They pour themselves one over the other like so much melted butter over parsnips. They catch each other under the chin, with a tender caress of the hand, and they smile with sunny melting tenderness into each other’s face.”
—D.H. (David Herbert)
“The greatest, or rather the most prominent, part of this city was constructed with the design to offer the deadest resistance to leaden and iron missiles that might be cast against it. But it is a remarkable meteorological and psychological fact, that it is rarely known to rain lead with much violence, except on places so constructed.”
—Henry David Thoreau (1817–1862)