exchange offer

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Exchange offer

An offer by a firm to give one security, such as a bond or preferred stock, in exchange for another security, such as shares of common stock.

Exchange Offer

An offer by a company to trade stocks or bonds for other stocks or bonds. For example, a firm may redeem bonds with other bonds of equivalent value. This often occurs when the firm has poor cash flow. Likewise, a company may redeem stocks in itself for other stocks, either in the same or another firm. An exchange offer of stocks is common following a merger or acquisition.

exchange offer

An offer by a firm to exchange its own securities for those of another firm or for a different series of the same firm's securities. For example, a firm may offer a new bond issue in exchange for an older series currently outstanding. Depending on the type of securities included in the offer, the security holder may be taxed for the exchange.
Case Study In April 2001 AT&T offered its stockholders shares in AT&T Wireless Group in exchange for shares of AT&T Corp. The exchange offer was intended to split off AT&T Wireless from the parent company as part of the firm's planned restructuring into three separate and independent corporations. At the time of the offer, AT&T owned approximately 70% of AT&T Wireless that traded on the New York Stock Exchange as a tracking stock. Japan's Nippon Telegraph & Telephone had earlier paid nearly $10 billion for 16% of AT&T Wireless. According to terms of the exchange offer, AT&T would issue 1.176 shares of AT&T Wireless Group for each share of AT&T stock. The exchange ratio represented a 6.5% premium compared to AT&T's common stock, which was then trading for $22 per share. AT&T announced it would accept up to 427.7 million shares of its common stock in the exchange, which would be conducted on a pro rata basis in the event AT&T stockholders tendered more than 427.7 million shares.
References in periodicals archive ?
5 billion in outstanding 11% Senior Secured Notes due 2015 of CCH I ("CCH I Notes") as well as up to an additional $675 million in additional CCH I Notes that may be issued in the private exchange offers.
I am very pleased that this exchange offer, together with our two previous successful exchange offers, establishes a much stronger financial foundation for Foster Wheeler, further enhancing our ability to deliver successful products and services that meet or exceed the expectations of our worldwide client base.
The consent solicitations and exchange offers will expire at 9:00 a.
The consent solicitations and exchange offers are being made only pursuant to the offering memoranda dated December 20, 2004 and the related letters of transmittal and consent and only to such persons and in such jurisdictions as is permitted under applicable law.
The exchange fees for both exchange offers are being increased by 0.
The exchange offers are each being made pursuant to a preliminary prospectus dated May 28, 2004, and related letter of transmittal, which more fully set forth the terms of the exchange offer.
today announced that it has launched exchange offers (the "Exchange Offers") for $175 million outstanding principal amount of its 10 1/2 percent Senior Notes due 2004 ("2004 Notes") and $125 million outstanding principal amount of its 9 5/8 percent Senior Notes due 2005 ("2005 Notes" and, together with the 2004 Notes, the "Existing Notes") and solicitations of consents to amend the indentures under which the Existing Notes were issued.
375% Cointel Series B Notes due 2004 (the "Cointel Series B Notes")) for two new series of TASA notes plus a cash payment (the "Cointel Exchange Offers" and together with the TASA Exchange Offers, the "Exchange Offers").
Each of the Exchange Offers was conditioned upon the receipt of at least of 90% of each class of existing notes.
The Company also announced that it has extended the expiration date of each of the Exchange Offers to 11:59 p.