What is a tender offer? SEC rules explained
A tender offer is a public offer by a bidder to buy some or all of a company's shares directly from its shareholders at a stated price, within a set window, usually above the current market price. Each shareholder decides whether to tender. In the US, a tender offer runs under SEC rules, with the bidder filing a Schedule TO and the target responding on a Schedule 14D-9. This guide explains what a tender offer is, the filings, and the timing. It is not investment advice.
Definition
A tender offer
is a public bid to buy shares directly from a company's shareholders at a fixed price over a set period, typically at a premium. In the US it is governed by SEC tender-offer rules, and the bidder must disclose the terms on a Schedule TO. Source: SEC.
What is a tender offer and how does it work?
A tender offer goes over the market and straight to shareholders. The bidder publishes an offer: a price per share, how many shares it wants, and a deadline. Shareholders who accept tender their shares to the bidder at that price. Offers are often conditional, for example on the bidder reaching a minimum number of shares. Because it is a public bid for control or a large stake, the SEC requires full disclosure so shareholders can decide on the same information.
What filings does a tender offer create?
The two core US documents put both sides on the record.
| Filing | Who files it | What it says |
|---|---|---|
| Schedule TO | The bidder | Offer price, terms, financing, and intentions |
| Schedule 14D-9 | The target company | The board's position on the offer |
How long does a tender offer stay open?
A US tender offer must stay open for at least 20 business days under SEC Rule 14e-1. A material change to the price or the amount sought generally forces an extension so shareholders have time to react.
20 business days
Minimum period a US tender offer must remain open under SEC Rule 14e-1
Source: SEC, Rule 14e-1
How does this compare in India?
India uses a related mechanism. When an acquirer crosses a threshold under the SEBI takeover code, it must make an open offer to public shareholders. The trigger and pricing rules differ from a US tender offer. The side by side is in tender offer vs open offer.
Where a tender offer sits for a smart-money reader
A tender offer is one way control changes hands, and the filings around it are public. To read the bidder's document see Schedule TO, and for the target's response see Schedule 14D-9. Both are on SEC EDGAR.
Flock reads disclosure filings and keeps each one dated and linked back to its source, so you can go from a summary to the original filing in one step. What any of it means for your money is your call to make.
Frequently asked questions
What is a tender offer in simple terms?
A tender offer is a public offer by a bidder to buy some or all of a company's shares directly from shareholders at a stated price within a set period, usually at a premium to the market. Shareholders choose whether to tender their shares. Source: SEC.
What SEC filings does a tender offer involve?
In the US, the bidder files a Schedule TO setting out the offer terms, and the target company responds with a Schedule 14D-9 stating its position. Both are filed on SEC EDGAR and are free to read. Source: SEC.
How long must a US tender offer stay open?
A US tender offer must remain open for at least 20 business days under SEC Rule 14e-1. If the price or the number of shares sought changes materially, the offer generally has to stay open longer. Source: SEC, Rule 14e-1.
What is the difference between a friendly and a hostile tender offer?
In a friendly tender offer the target's board supports the bid. In a hostile one the bidder goes to shareholders over the board's objection. Both follow the same SEC disclosure rules; the difference is the board's stance in its Schedule 14D-9. Source: SEC.
Flock tracks these filings, sourced, dated, and linked back to the original. See what smart-money entities disclosed, without the guesswork about what it means.
Disclosures shown are public regulatory filings. Data may be delayed or incomplete. Smart-money entities may no longer hold positions shown. Not investment advice.