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← Series 79: M&A, Tender Offers & Restructuring
Series 79 practice questionhardWilliams Act and Tender Offer Regulation

A bidder commences a tender offer at $45 per share for all outstanding shares of TargetCo. After 15 business days, the bidder increases the offer price to $50 per share. What is the effect on the tender offer timeline?

  1. AThe offer must remain open for an additional 20 business days from the price change
  2. BThe offer must remain open for at least 10 additional business days from the date of the price increase✓ Correct answer
  3. CThe original 20-business-day period is unaffected by the price change
  4. DThe offer automatically terminates and must be recommenced as a new offer
Explanation

Why B — The offer must remain open for at least 10 additional business days from the date of the price increase

Under SEC Rule 14e-1(b), if the bidder makes a material change to the tender offer terms, such as a change in the price offered or the percentage of securities sought, the offer must remain open for at least 10 business days from the date of the change. A price increase is considered a material change that requires this extension. This ensures that shareholders who may have already tendered at the lower price have adequate time to reconsider their decision.

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