Eitan Eldar: When Does Tender Offer Apply?

In most of the cases, tender offers apply under two situations, as describes businessman Eitan Eldar. What are these two situations?

  1. Interest in turning the company into private – Eitan Eldar tells that here, the controlling shareholder of a company removes it from the public market. He submits a tender offer which is higher than its market price. When the other shareholders are considered 95 percent of a company and agree to the offer, he can oblige the remaining shareholders to sell their shares as a part of this offer.
  2. No controlling block in the company – Another scrnario, as points out Eitan Eldar, happens when there isn’t any controlling block. In order to get more than 25 percent of the company, a tender offer is needed for 5 percent, in order to achieve 30 percent. Then, it is possible to purchase up to 44.9 percent, and again perform a tender offer for 5 percent – to get 50 percent.

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