How a Tender Offer Works for Ordinary Shareholders
A buyer is offering cash for your shares directly. Here is how the Schedule TO process runs, what the minimum condition means and what happens to shares that are not tendered.
A tender offer is a public offer by a buyer to purchase your shares directly, usually for cash, at a fixed price. Under SEC Rule 14e-1 it must stay open at least 20 business days, and you can withdraw tendered shares any time before it expires. The terms are in the buyer’s Offer to Purchase, filed with Schedule TO on SEC EDGAR.
Buyers use tender offers because they can be faster than a merger vote. In a friendly deal, the target’s board signs a merger agreement first, then the buyer launches the offer and closes a second-step merger right after it succeeds.
What documents come with a tender offer?
Two SEC filings carry the details: the buyer’s Schedule TO and the target’s Schedule 14D-9.
| Document | Filed by | What it tells you |
|---|---|---|
| Schedule TO with the Offer to Purchase | The buyer (form type SC TO-T on EDGAR) | Price, expiration time, conditions, how to tender and withdraw, plans for a second-step merger |
| Letter of Transmittal | The buyer, as an exhibit | The form registered holders sign to tender; street-name holders use their broker instead |
| Schedule 14D-9 | The target company | The board’s recommendation, the background of the deal, the bankers’ fairness opinion, and treatment of employee equity |
| Schedule TO amendments (SC TO-T/A) | The buyer | Extensions, price changes and the final results |
The target’s board has to tell shareholders its position on the offer within 10 business days after the offer starts, under SEC Rule 14e-2.
How long does a tender offer stay open?
At least 20 business days from the day it is first published or sent to holders. If the buyer changes the price or the percentage of shares sought, the offer must stay open at least 10 more business days from the notice of that change (17 CFR 240.14e-1).
Offers are often extended, for example while an antitrust waiting period runs. Any extension must be announced by 9:00 a.m. Eastern time on the next business day after the old expiration, together with the approximate number of shares tendered so far. Expiration times are usually stated to the minute, such as “one minute following 11:59 p.m., Eastern Time.”
Can I change my mind after tendering?
Yes. SEC Rule 14d-7 gives you the right to withdraw tendered shares at any time while the offer remains open. Once the offer expires and the buyer accepts shares, withdrawal ends.
Some offers add a subsequent offering period of at least three business days after the main offer succeeds. Shares tendered in that period are bought and paid for promptly, at the same price, but there are no withdrawal rights in it.
What is the minimum condition?
The minimum condition is the share count the buyer must receive before it is required to buy anything. In a friendly deal it is usually set at the level needed to complete the second-step merger without a vote.
Sanofi’s offer for Dynavax Technologies shows the full cycle. Sanofi offered $15.50 per share in cash on January 12, 2026. The offer and withdrawal rights expired as scheduled on February 9, 2026, and Sanofi reported that tendered shares plus shares it already owned made up about 73.92% of Dynavax’s outstanding stock, which satisfied the minimum condition (Schedule TO amendment, February 10, 2026). Other usual conditions include antitrust clearance and the absence of a material adverse change at the target.
How do I tender shares held at a broker?
If your shares are in a brokerage account, only the broker can tender them, on your instructions. You do not sign the Letter of Transmittal yourself.
- Watch for a notice from your broker (by email, in the app, or by mail) that includes the Offer to Purchase and an instruction form.
- Note the broker’s own deadline. Brokers usually need your instruction earlier than the official expiration time so they can process it.
- Submit the instruction online or by phone, stating how many shares to tender.
- Your shares move to a “tendered” status and cannot be sold while tendered.
- To withdraw, tell the broker before its withdrawal deadline.
- After the buyer accepts the shares, the cash is paid through the depositary to your broker.
Whether to tender is your own decision; the 14D-9 explains the board’s view, and a financial professional can discuss your situation.
What happens if I do not tender?
In a friendly deal for a Delaware company that uses a second-step merger, untendered shares are converted into the same cash price shortly after the offer closes. Section 251(h) of the Delaware General Corporation Law allows that merger without a shareholder vote when the buyer ends up holding enough shares to have approved it, and it requires untendered shares to receive the same amount and kind of consideration as the offer.
The practical difference is timing. Tendered shares are paid soon after the offer expires; untendered shares are paid after the merger closes. In the Dynavax deal, Sanofi said it intended to complete the merger as promptly as practicable and without a stockholder meeting, after which the shares would be delisted from Nasdaq.
Holders who do not tender and who follow Delaware’s procedure keep appraisal rights, which let a court set fair value instead. If the buyer does not get enough shares and the offer fails, nothing is bought and you keep your shares. For the mechanics of a vote-based deal instead, see our guide to what happens to your shares in a merger.
Bottom line
Every buyer must pay all holders the same, highest price paid in the offer under SEC Rule 14d-10, so a holder who tenders on day one gets any later price increase too. The date to put on your calendar is your broker’s deadline, which can be a day or more before the expiration printed in the offer.
FAQ
Is a tender offer the same as a merger?
No. A tender offer buys shares directly from holders, while a merger converts all shares at once after a vote or under Section 251(h). Friendly deals often use both: the offer first, the merger right after.
What is a partial tender offer?
Some offers seek only part of the shares, such as a company buying back stock. If more shares are tendered than the buyer will take, it buys from each holder on a pro rata basis and returns the rest.
Can a tender offer be extended many times?
Yes, within the limits of the merger agreement. Each extension must be publicly announced by 9:00 a.m. Eastern on the next business day, with the number of shares tendered so far.
Where do I find the tender offer documents?
Search the target company on SEC EDGAR and filter for SC TO-T and SC 14D9. The broker’s notice usually links to the same Offer to Purchase.
