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