A tender offer is a tool in securities law for acquiring shares of stock. Typically, a bidder offers a single price and states they are seeking a certain number of shares. Likewise, the proposed value of the offer is almost always higher than the current share price. Also, tender offers usually have expatriation dates.
You might want to know more about the basics, especially if you've never conducted or encountered a tender offer before. A securities lawyer will want to broach these three topics regarding tender offers.
Who Initiates TOs?
When a company initiates a TO, they are considered the bidder. Three typical bidders initiate tender offers.
One of the most common types of bidders is a company looking to buy back its shares. Some firms do this to trim their overall outstanding shares and assert more control. Others do it to reward shareholders by driving up the price, a common tactic by firms that don't do dividends or offer low ones.
Secondly, companies attempting hostile takeovers may pursue tender offers. Likewise, a firm resisting a takeover might do a TO to regain control of shares and fight back.
Finally, some investment funds will do them. Especially if a fund has a stated mixture of securities in its portfolio, it may need to do a tender to reach its goal.
Whenever a party conducts a tender offer, they will have to make material statements. A material statement is anything an investor would want to know before they sold their shares to the bidder. For example, a statement should cover the size of the offer, pricing, and the expiration date. Similarly, it should cover what company is handling the transaction and what that firm's stake in the offer is.
It's a good idea to have a corporate lawyer approve all material statements to ensure you don't cross any lines. An investor who feels a TO was misrepresentative may sue for negligence or even fraud based on what they feel was wrong with the material statements.
Bidders must submit the SEC's Schedule TO form. Targeted companies must file a Schedule 14D-9 and state the company's position regarding the TO. When a tender offer is available, the target company must provide a shareholder list to the bidder so they can propose the offer and provide information about it. Also, some bidders include language that prevents the purchase if they can't acquire a sufficient amount of shares to justify the acquisition.
For more help, contact a local securities law firm, such as Carter West Law, near you.
I'll be up front: I have a criminal record. As someone who's spent lots--and lots--of time looking for a job in my life, I've gotten used to being up front with this fact. It's difficult to get hired with this on my record, and frankly, it never gets less scary to have to tell an interviewer about it. But that doesn't mean I'm unemployable. I'm a hard worker who can bring a lot to any company. And I also know what an employer needs to do for me. I know my rights. There's no federal law protecting me from discrimination due to my record, but there are plenty of state laws that make it a little easier for me. If you're looking for a job and you have a criminal record, read through this information. Protect yourself during a job search. Know your rights.