Tender Offer
Tender Offer
A tender offer is a public, open bid made by an individual or entity to purchase some or all of Shareholder/">Shareholders’ Shares in a Corporation, typically at a specified price that is higher than the current market price. This approach is often used in Mergers and Acquisitions and serves as a way for the offering party to gain control of the target company.
Examples:
- Example 1: Company A offers $50 per Share to acquire Company B, whose Shares are currently trading at $40. Shareholder/">Shareholders of Company B may accept the offer to realize a profit.
- Example 2: A Private Equity firm launches a tender offer for a public company, aiming to purchase 100% of its Shares/">Outstanding Shares at a premium to incentivize Shareholder/">Shareholders to sell.
Cases:
- Case 1: In 2011, Oracle Corporation made a tender offer for Sun Microsystems, which was accepted by a majority of Shareholder/">Shareholders, leading to a successful acquisition.
- Case 2: In 2006, a hostile tender offer was made by Pfizer for Wyeth, which led to extensive negotiations before the deal was finalized.