What is a Mini-Tender?

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

How Does a Mini-Tender Work?

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 Does a Mini-Tender Matter?

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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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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