What Is a Tender Offer?

By Robin Hartill, CFP – Updated Feb 22, 2025 at 10:23 AM EST

Key Points

Tender offers allow investors to buy shares above market price, often aiming for company control.
SEC rules require a tender offer to remain open for at least 20 business days.
Shareholders can profit from tender offers but must consider long-term stock potential.

If an investor wants to take control of a company -- or if a company wants to buy back its own securities -- they may make a tender offer. A tender offer is a public bid from an investor or investment group to buy a large number of a company's shares. Usually, it applies to all shareholders or a substantial majority, and the bid is often at a premium above the market price.

Loading paragraph...

A colorful, abstract collection of stock trading charts. — Image source: Getty Images.

Loading image...

Loading paragraph...

A share of stock represents ownership in a company, entitling holders to a portion of its assets, profits, and voting rights.

Loading paragraph...

How Are Stock Prices Determined?

Every stock has a price. Learn how it gets calculated, plus check out a few examples of share price valuations.

What Is the Stock Market & How Does It Work?

So what is the stock market anyway?

Selling Stock: Are There Tax Penalties on Capital Gains?

Selling stock can mean capital gains tax. What is it, and how do you minimize it?

Loading hub_pages...

Macy's board of directors rejected the bid in late January 2024, saying it "lacks compelling value." As of this writing, a hostile takeover looked like a possibility since Arkhouse said in a statement that it was willing to "pursue all necessary steps, including direct engagement with stockholders" in its efforts to acquire the retailer.

Loading paragraph...

About the Author

Robin Hartill, CFP, is a contributing writer at The Motley Fool. Robin’s work has also been published by Yahoo Finance, USA Today, and Penny Hoarder. She is a graduate of the University of Florida.

TMFRobinHartill

Robin Hartill has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.