Tender Offer

Definition:

When an issuer or a third party makes a public invitation to all shareholders to tender their shares for purchase at a specified cash price. Such offers are primarily governed under the Exchange Act. The exact application of this term is not clearly defined in statute, and case law is still used to identify the factors that indicate that a transaction is a Tender Offer. Tender Offers are often used by a third party to gain control of a Public Company by offering an amount at a premium above the shares’ market price. The issuer may use Tender Offers to reduce the amount of its outstanding Common Stock.

See Wellman v. Dickinson.

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