In a tender offer, if the maximum shares the company intends to buy exceeds the tendered share amount, how are the purchased shares allocated?

In a tender offer, if the maximum shares the company intends to buy exceeds the tendered share amount, how are the purchased shares allocated?

• A. All shares will be purchased
• B. Pro-rata basis
• C. First-come, first-served
• D. None will be purchased

Answer: (A)

In the context of a tender offer, if the maximum number of shares that the company intends to buy exceeds the number of shares that have been tendered, all the shares that were tendered will indeed be purchased. This situation indicates that there is sufficient capacity within the company's offer to cover all the shares submitted by shareholders. When a tender offer is made, shareholders can choose to tender their shares; if the number of shares tendered is below the maximum limit set by the company, the company has the ability and the obligation to purchase all of those shares. This promotes confidence among shareholders, knowing that if they choose to participate, their shares will be acquired if they voluntarily tender them.

In the context of a tender offer, if the maximum number of shares that the company intends to buy exceeds the number of shares that have been tendered, all the shares that were tendered will indeed be purchased. This situation indicates that there is sufficient capacity within the company's offer to cover all the shares submitted by shareholders. When a tender offer is made, shareholders can choose to tender their shares; if the number of shares tendered is below the maximum limit set by the company, the company has the ability and the obligation to purchase all of those shares. This promotes confidence among shareholders, knowing that if they choose to participate, their shares will be acquired if they voluntarily tender them.