What is a stock tender offer?

Answer 1

A tender offer is a offer made to shareholders of record to buy their shares at a specific price during a specific amount of time. A company's shareholders are publicly notified of such an offer and decide if they would like to submit their shares to the offering party. The offering party will typically have a set number of shares they are trying to purchase. Tender offers typically occur when a party wishes to take over a company or at least take a large stake in a company. Buying a large number of shares in the open market could artificially push up the price of the shares. To avoid this the offerer is setting a price they are willing to pay and getting them all at once. Another common use of a tender offer is when the corporation wishes to buy its own stock back in a large share repurchase plan. Microsoft is a recent example of this process.