It’s not the Jedi, to be sure, but it is a bit of Back to the Future. The tender offer–the technique that started the whole corporate-governance ball rolling, which in its devilish way has slip-slided around the board and management to get to the “owners”–is making a comeback.
The tender offer has been spurned since some really bad judicial decisions turned the SEC’s “best-price” rule into a liability monster, allowing plaintiffs to claim that any and all side deals with managers who happened to own stock resulted in extra pay for management’s shares–and thus requiring every stockholder to be “topped up” in like amount. Tenders are now making a comeback, though, thanks to the SEC’s speedy (what’s a dozen years or so?) amendment to Rule 14d-10.
In this recent Memorandum, Mark Gordon lays out the tactical and other considerations being weighed by deal planners who now have this tool back in their toolboxes. It’s enough to bring a tear to even the most hard-eyed veteran of the ’70s and ’80s.
The full Memorandum is available for download here.