Series 79 practice questionhardTender Offer Rules
According to the all-holders/best-price rule, if a bidder offers a higher price to certain shareholders during a tender offer, what must occur?
- AThe offer can proceed as long as the SEC is notified
- BThe higher price can only be paid to shareholders that tender first
- CInstitutional investors may receive a premium
- DAll tendering shareholders must receive the highest price paid to any shareholder✓ Correct answer
Explanation
Why D — All tendering shareholders must receive the highest price paid to any shareholder
The all-holders/best-price rule requires every tendering shareholder to receive the best price offered to anyone else. Violating this would create unfairness and is prohibited by SEC rules.
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