Public offering of purchase

A Public offering of purchase or tender offer is an offer of acquisition in cash at a given price of the totality of the capital of a target company. The release of the tender offer makes begin one period from time during which the shareholders have the possibility of bringing or not their actions to the company.

One generally opposes the friendly or requested tender offers, when the two parts got along on the methods of the offer, of the or not requested hostile tender offers.

Some stiffnesses - people who launch only a hostile tender offer seek sometimes what one calls a " greenmail" , i.e. the installation of a defense anti-tender offer by the target will result in an impoverishment such as that would make it better pay in cash the stiffness so that it stops its attack. A stiffness famous for this kind of operation is the financier Carl Icahn.

The first hostile tender offer in France was carried out by the glassmaker BSN on Saint Gobain at the end of the years 1960. It was a failure, which generated the group Danone.

Modes of defense anti-tender offer

Anglophone Wikipedia is very documented on this subject:

Pacman : The principle is to make the tender offer more expensive for the attacker while absorbing of another company or subscribing to a capital growth. The target will be thus more expensive, more difficult to repurchase because of the new emitted actions and sometimes this strategy gives place to a pill poisoned in the event of repurchase by the target of other firms by debt which the attacker will have to refund.
White knight : Consist in making launch against concurrent tender offer by a combined third to the company, in this case, it is appropriate to pay attention because the knight will find in significant possession on the one hand hjt the operation of purchase under various pretexts. Or to include in the statutes of the target a clause of the kind: " if an individual shareholder has more than 25% of the firm, then its rights to vote will be divided of moitié". These clauses are however difficult to implement because they can go against the principle of " freedom of movement of the capital" or to call into question the principle according to which the shareholders must have the best price in the event of repurchase of their company. This particular defense is not possible that in certain states of the United States like Delaware, Nevada or Arizona.
Crown jewels : Consist in yielding the strategic credits (patents for example) during the operation of purchase. The purchaser thus finds himself with a “empty shell”.
Separation of the capital and the capacity : The use of a legal form of the type SCA makes it possible to separate detention from the capital of the capacity of management. The interest of the tender offer is thus strongly decreased.
Organization of the renewal of the administrators : The Statuts of the company organize the renewal of the board of directors per quarter or third. The entry of the purchaser to the head of the company is thus delayed.

See too

Public offering

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