Wellman v. Dickinson

Definition:

Wellman v. Dickinson, 475 F.Supp. 783, 823-24 (S.D.N.Y. 1979), aff’d on other grounds, 682 F.2d 355 (2d Cir. 1982), cert. denied, 460 U.S. 1069 (1983). Most courts refer to the eight-factor test suggested by the SEC and approved in Wellman v. Dickinson to determine whether a series of purchases constitutes a Tender Offer. Not all eight factors (listed below) need be present for the court to find a Tender Offer.

1. Was there an active and widespread solicitation of shares by the offeror?
2. Was the solicitation of a substantial percentage of the outstanding stock?
3. Was a premium price offered over the prevailing market?
4. Were the terms fixed rather than negotiable?
5. Was the offer contingent on the tender of a fixed minimum number of shares?
6. Was the offer open for a limited period of time?
7. Was there pressure put on shareholders to sell their stock? and
8. Were there public announcements accompanying the offer?

Also referred to as the Wellman Test.

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