Investing term

What is Tender offer?

A public offer to buy your shares at a stated price by a stated date.

A tender offer is a public proposal to buy shareholders' shares at a stated price by a stated deadline, usually at a premium to the market price. It's often used to take over a company or for a company to buy back a large block of its own stock. You choose whether to 'tender' (sell) your shares into the offer or hold onto them.

Because it demands a decision, a tender offer is a corporate action you can't safely ignore. Tendering locks in the offer price; holding is a bet that the shares will be worth more — either because a higher bid emerges, or because you think the offer undervalues the company. Ignoring the offer entirely means keeping shares whose price may move sharply once the offer resolves, and possibly missing a premium you could have taken. The right choice depends on the premium, the odds of a better deal, and your view of the company's worth.

Tender, or hold out?
An offer at a premium — you must choose by the deadlineOffer: $52vs $45 market — a premiumTender → take $52 nowHold → bet on moreIgnore it and the broker's default applies — rarely in your favour.

A tender offer asks you to sell at a stated price by a deadline — usually a premium. You choose to tender for the premium or hold for more; ignoring it lets the broker's default apply.

For example

A bidder offers $52 a share for a stock trading at $45; you decide whether to tender your shares for the $52 premium or hold out for more.

Learn it by doing

That's Tender offer in theory — it clicks when you use it. Practise it hands-on in a free, interactive lesson (Stage 8, Corporate Actions: What Lands in Your Account).

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Why it matters to you

Tender offers matter because they force an active decision with real money at stake — accept a premium now, or hold for a potentially better outcome and risk missing out. Understanding that ignoring the offer is itself a choice (with its own default consequences at your broker) is what prompts you to actually weigh it. The decision turns on concrete factors — the size of the premium, the chance of a competing bid, and your estimate of fair value — rather than inertia.

⚠ Letting a tender offer pass by default

A tender offer requires you to decide by a deadline; doing nothing means your broker applies a default, and you may forfeit a premium or end up in an outcome you didn't choose. Treating the notice as safe to ignore can cost you real value. When an offer asks you to tender or hold, make the choice deliberately rather than by inaction.

Frequently asked questions

What is a tender offer?

A tender offer is a public proposal to buy shareholders' shares at a stated price by a set deadline, usually at a premium to the market price. It's often used to acquire a company or buy back a large block of stock. Shareholders choose whether to 'tender' (sell) their shares into the offer or hold them.

Should I tender my shares?

It depends on the premium offered, the chance of a higher competing bid, and your view of the company's fair value. Tendering locks in the offer price; holding bets the shares are worth more. There's no universal answer — but ignoring the offer entirely, and letting a default apply, is rarely the best approach.

What happens if I ignore a tender offer?

Ignoring it means your broker applies its default action, and you may miss the premium or end up in an outcome you didn't choose. A tender offer is a voluntary corporate action requiring a decision by a deadline, so inaction is itself a choice — usually not the one most in your favour.

Related terms

AcquisitionOne company buys another. The bought company's shares are converted to cash, acquirer stock, or a mix at the closing price.Carve-outA parent company sells part of a subsidiary in an IPO, keeping a stake.Corporate actionAny event initiated by a company that changes its securities or distributes value to holders.Cost basisWhat you originally paid for a holding, used to calculate gains and losses when you eventually sell.
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