What is a tender issue?
Also known as issue by tender, a tender issue is when investors are invited to bid for the chance to buy shares in an organisation. The bids need to be above a certain price and the shares are sold to the investor with the highest offer. It is a little-used method of releasing a new issue of stock to the public.
Where have you heard about tender issues?
Tender issues are occassionally made by large organisations and even governments. The early privatisations in the UK, such as Britoil (1982 and 1985) and Cable and Wireless (1981), were tender issues.
What you need to know about tender issues.
A tender issue is usually time limited. A bidder will offer their price at a certain time and for a certain number of shares.
Tender issue is also how the Bank of England issues treasury bills to banks as a way of borrowing money on behalf of the government. Discount houses underwrite the weekly tender issue of Treasury bills by competitively bidding for any not sold.
Find out more about tender issues.
Tender issues are proposed by organisations. When a bidder starts the process, it's called a tender offer.