Definition of Tender Offer

What is a "tender offer"? What is the definition of the term "tender offer"?

In the world of finance, the term "tender offer" refers to when an offer is publicly made to the shareholders of a publicly traded company to tender some or all of their shares.

The tender offer is usually conditional - for instance, a tender offer may only be valid if the majority of a company's shareholders agree to tender their shares.

A "tender offer" is usually made at a premium to what a company's shares are currently trading at - for instance, if a stock is currently trading at $30 per share, then a tender offer may offer shareholders $35 for their shares.

A "tender offer" will exist for a finite period of time - for instance, shareholders may have up to 6 months to decide if they are going to tender their shares or not.

Directors of a company may or may not be in favor of a tender offer, which is why the bidder will contact shareholders directly.

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