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:
“That good disposition which boasts of being most tender is often stifled by the least urging of self-interest.”
—François, Duc De La Rochefoucauld (1613–1680)
“The poet will prevail to be popular in spite of his faults, and in spite of his beauties too. He will hit the nail on the head, and we shall not know the shape of his hammer. He makes us free of his hearth and heart, which is greater than to offer one the freedom of a city.”
—Henry David Thoreau (1817–1862)