tender offer

noun
Updated on: 26 Jul 2017

Definition of tender offer

  1. :  a public offer to buy not less than a specified number of shares of a stock at a fixed price from stockholders usually in an attempt to gain control of the issuing company

First Known Use of tender offer

1967


Financial Definition of TENDER OFFER

tender offer

What It Is

A tender offer is a proposal by an investor to all current shareholders of a publicly traded corporation to tender their shares for sale at a certain price at a certain time.

How It Works

The prospective acquirer typically offers a higher price per share than the corporation's stock price. This provides shareholders with a greater incentive to unload their shares. For example, if a stock's current price is $10/share, someone wishing to take over the company might issue a tender offer for $12/share on the condition that he can acquire at least 51% of the shares.

Why It Matters

Tender offers can be executed without the consent of the company's board of directors. The potential acquirer can work directly with shareholders to takeover the company. Sometimes this is referred to as a "hostile takeover."


TENDER OFFER Defined for English Language Learners

tender offer

noun

Definition of tender offer for English Language Learners

  • business : an offer to buy a certain number of stock shares of a company for a set price in order to gain control of the company


Law Dictionary

tender offer

noun

Legal Definition of tender offer

  1. :  a public offer to purchase a specified number or range of shares from shareholders usually at a premium and in an attempt to gain control of the issuing company

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