TLDR:
A tender offer is a public bid made by an acquiring company or individual to purchase shares of a target company at a specified price, usually at a premium to the current market price, to gain control.
Tender Offer Process
Public company tender offers are subject to the Williams Act and SEC Rule 14D, requiring the offeror to keep the offer open for at least 20 business days, extend the offer if increased, allow shareholders to withdraw tendered shares, and pay the same price to all tendering shareholders. For friendly acquisitions, tender offers can close faster than mergers (which require shareholder meetings and proxy statements), making them a popular structure for strategic acquirers who want to move quickly. Hostile tender offers launch without board approval, attempting to purchase shares directly from shareholders over the target board’s objection.
Tender Offer Mechanics
In a tender offer, the bidder publicly offers to purchase shares at a specified price, leaving each shareholder to decide whether to tender. Tender offers may be “any-and-all” (the bidder commits to purchase all tendered shares at the offer price) or “partial” (capped at a specified percentage of outstanding shares). Successful tender offers typically include a minimum-tender condition (often requiring more than 50% of shares to be tendered) and various regulatory conditions.
Regulatory Framework
Tender offers for US public companies must comply with the Williams Act, which mandates a minimum 20-business-day offer period, full disclosure to shareholders (Schedule TO and Schedule 14D-9 from the target), equal treatment of tendering shareholders, and withdrawal rights. EU markets follow analogous rules under the Takeover Directive, and Turkish public tender offers are regulated by SPK (Capital Markets Board) under Article 26 of the Capital Markets Law with mandatory tender thresholds at 25%, 50%, and 75% control.