In a tender offer (public takeover bid), a party makes a public offer to shareholders to sell their shares at a fixed price. A tender offer is a voluntary corporate action, meaning shareholders can choose whether or not to participate. An exchange offer is a specific type of tender offer where shares or other non-cash alternatives are offered instead of cash.
In some tender offers, there may be an odd-lot preference. This applies to beneficial holders of fewer than 100 shares (99 shares or less) who are tendering all of their shares. If accepted, these holders are exempt from any prorated acceptance, meaning all of their shares will be acquired. Only shareholders who hold 99 shares or fewer and tender all of them are eligible. This preference is not available for partial tenders or for holders of 100 or more shares.
Please note that due to the omnibus structure of DEGIRO, it will generally not be possible to facilitate the odd-lot preference.
If the majority of the shares are tendered, i.e., the majority of the shares have been offered for sale under the tender offer’s conditions, during the first tender period, a second (and often final) tender period may be initiated. If a majority of the remaining shares are tendered at the end of the second period, the acquiring company may decide to delist the shares from the stock exchange.
Investors who do not tender or sell their shares may risk holding a delisted and non-tradeable position, meaning we would no longer be able to sell those shares as they are no longer publicly traded.
What is a squeeze out?
In some cases, the acquiring company may initiate a squeeze-out, where any non-tendered shares are acquired through a compulsory takeover. However, there is no guarantee that a squeeze-out will occur. It generally takes over one year after delisting for any squeeze-out process to begin.
All relevant information about a company’s corporate actions can be found on the company’s Investor Relations page.