Tender offer
A tender offer asks holders to sell their securities to a bidder at a stated price and within specified conditions and period. It may be used in an acquisition, including one opposed by the target board, but its mechanics, required disclosures and shareholder protections vary by jurisdiction. The price may be paid in cash, securities or a combination. Acceptance, minimum conditions and regulatory clearance affect whether the bidder obtains the desired holding.
Worked example
A bidder offers $12 cash for each target share, conditional on receiving sufficient acceptances and regulatory approval. An individual shareholder evaluates the price and conditions rather than assuming completion is certain.
Common mistake
Assuming a tender offer always succeeds or that the announced consideration is received before all conditions are met.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AFM | Direct | September 2026–June 2027 |