Self-Tender Offer

A firm's offer to buy back its own stock for a price well above fair market value. A self-tender offer usually excludes a targeted number of shareholders; it is not intended to stop trade on its stock. Rather it is an attempt to prevent a real or suspected hostile takeover. If a firm becomes its own majority or plurality shareholder, it either makes a hostile takeover impossible or much more expensive for the company attempting to buy it out. See also: Antitakeover measure.

self-tender

An offer by a firm to repurchase some of its own securities from stockholders, generally on a pro rata basis from those shares offered for sale. A self-tender may be preferable to purchase of the securities in the open market because a self-tender is quicker and will not disrupt public trading in the securities. Firms frequently repurchase their own stock from investors holding fewer than a set number of shares in order to eliminate the high cost of servicing small stockholders. A self-tender is similar to a buyback except that buybacks often refer to repurchases from special groups or a few large holders. Also called stock repurchase plan.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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References in periodicals archive

Flooring solutions company Armstrong Flooring Inc (NYSE:AFI) on Monday reported the expiry and preliminary results of its modified "Dutch auction" self-tender offer to repurchase up to USD50m in cash of its common stock at 12:00, midnight New York City time, at the end of 14 June 2019.

Armstrong Flooring updates the preliminary results of modified 'Dutch Auction' self-tender offer

Upon completion of the share issuance, the self-tender offer and the other transactions contemplated by the stock purchase agreement, CFL beneficially owns 51% of PDN's outstanding shares of common stock, on a fully-diluted basis.

Professional Diversity Network closes transaction with Cosmic Forward Limited

Lie (2002) specifically tests whether tender offers are used to optimize capital structure and provides evidence that firms initiate self-tender offers when ex ante debt levels are below predicted levels.

An empirical examination of the stated purposes of issuer tender offers to purchase common stock

Gray, "The self-tender repurchase anomaly," Working Paper, University of Chicago, 2005.

References

There are other ways a public company can be taken private, including an issuer self-tender offer and an asset sale and dissolution.

Board guidance for going private: five critical debating points for boards with an ESOP transaction on the agenda

Lie and McConnell (1998) examined whether earnings improvement following fixed-price self-tender offers is greater than the Dutch auction self-tender offers, and concluded that there was evidence of earnings improvement following both types of self-tender offers.

Using treasury "repurchase" shares to stabilize stock markets

successfully completed its second attempt at a self-tender offer to purchase shares of its common stock at a price of $9.15 per share.

Rottlund delists. (Farewell)

(Santa, Ana, Calif.), which held 10% of Bridgeport's stock, notified the SEC of its intention to increase its percentage holdings in Bridgeport "and actively assist the company in the improvement of its performance." HTH wanted Bridgeport to "self-tender," or offer to repurchase its own stock at a price of $10.125, with funds from a line of credit that HTH would arrange.

Sale to Goldman Industrial Includes All of Bridgeport Machines

These steps included a counter-tender offer for Z's shares, a self-tender offer for X's own shares, and a judicial challenge of Z's credit agreement and Z's obligations under a consent agreement with X.

Deductibility of target's professional fees in a hostile takeover

M2 EQUITYBITES-June 18, 2019-Armstrong Flooring updates the preliminary results of modified 'Dutch Auction' self-tender offer

Armstrong Flooring updates the preliminary results of modified 'Dutch Auction' self-tender offer

Flooring solution company Armstrong Flooring Inc (NYSE:AFI) disclosed on Friday the launch of a modified "Dutch auction" self-tender offer to repurchase up to USD50m in cash of shares of its common stock, at a price per share within the range of USD11.70 to USD10.20, less applicable withholding taxes and without interest.

Armstrong Flooring begins tender offer to repurchase up to USD50m common stock