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A tender offer for less than 5% of shares outstanding. A tender offer is an offer to buy a significant amount of stock in a publicly-traded company directly from shareholders, an act that bypasses the board of directors. A tender offer may be part of a hostile takeover and therefore any offer exceeding 5% of the company's shares must be registered with the SEC and submitted to oversight. A mini-tender offer avoids this requirement, which can be detrimental to shareholders, as the SEC does not have the ability to protect their rights.
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An offer to purchase less than 5% of a company's stock. Investors are at greater danger in a mini-tender offer because it is not subject to many of the SEC disclosure and procedural protections that apply to traditional tender offers. For example, tendering shares in a mini-tender offer generally means an investor cannot change his or her mind even though the tender has not closed.
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.