Company A makes a tender offer to purchase all outstanding shares of Company B at $50 per share, a 25% premium over the current market price of $40. A customer who owns 1,000 shares asks their registered representative for advice. Which of the following is TRUE?

AThe registered representative must advise the customer to accept the tender offer
BThe customer must tender all 1,000 shares or none at all
CThe customer has a minimum of 20 business days to decide whether to tender their shares, and may withdraw tendered shares at any time during the offer period✓ Correct answer
DThe tender offer must remain open for exactly 10 business days

Explanation

Why C — The customer has a minimum of 20 business days to decide whether to tender their shares, and may withdraw tendered shares at any time during the offer period

Under SEC Rule 14e-1, a tender offer must remain open for a minimum of 20 business days, giving shareholders adequate time to evaluate the offer. Additionally, shareholders have the right to withdraw their tendered shares at any time during the offer period. Registered representatives should present the facts of the tender offer but cannot make recommendations regarding tender decisions. Shareholders may tender all, some, or none of their shares depending on the terms of the offer.

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