Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Mini-Tender

What it is:

A mini-tender is an offer from an outside buyer for up to 5% of a company's stock.

How it works (Example):

In a traditional tender offer, a company offers to repurchase shares of stock from its investors at a certain price per share. In a mini-tender, or mini-tender offer, a third-party investor offers to buy up to 5% of a given company from the company's existing shareholders.

For example, suppose Fund ABC, an institutional investor, wishes to take a 5% stake in Company XYZ. Fund ABC would announce a mini-tender in which it offers Company XYZ's shareholders an opportunity to sell their shares to Fund ABC at a specific price by a definite date.

Why it Matters:

Unlike traditional tender offers, mini-tenders are not subject to SEC filing regulations. As a result, investors are strongly advised to consider their terms carefully. Mini-tenders frequently offer below-market pricing and do not give stockholders the option of withdrawal prior to the deadline date.

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