CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.1% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

What is a tender offer?

Tender offer

A tender offer is a type of takeover bid, when a potential buyer makes an offer to the shareholders of a publicly traded company to purchase the majority of shares in the firm. The offer is only for a limited time period and set at a specific price.

Where have you heard about tender offers?

Tender offers are often announced in the media, and are a key aspect of takeovers. A number of publicly traded companies have been acquired through tender offers, such as fast food giant Burger King, which was bought by private equity firm 3G Capital in 2010.

What you need to know about tender offers...

The price offered to shareholders in a tender offer is usually higher than the market price to give them more of an incentive to sell their shares.

For example, if a stock’s current price is £6 per share, the acquiring company might issue a tender offer for £8 per share on condition that at least 51% of shareholders agree to sell.

The bidder contacts shareholders directly as the directors of the target company might not have approved the proposal. Shareholders who refuse to tender their shares risk the price of the stock falling if the deal falls through.

Find out more about tender offers...

Visit our mergers and acquisitions pages to learn more about the consolidation of companies.

Related Terms

Latest video

Latest Articles

View all articles

Still looking for a broker you can trust?

Join the 610,000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading