SEC Staff Shortens Minimum Tender Offer Period For Certain All-Cash Offerings To 10 Business Days

On April 16, the Division of Corporation Finance (the Division) of the Securities and Exchange Commission (the SEC or the Commission) issued a new Exemptive Order under Exchange Act Rules 13e 4(f)(1)(i) and 14e 1(a) that reduces the minimum tender offer period for all cash, fixed price domestic tender offers from 20 to 10 business days. The Division issued the Exemptive Order to address market inefficiencies, better reflect technological advancements, and reduce exposure to market fluctuations, marking a meaningful shift in the regulatory framework governing tender offer timing. Critically, this is a standing, general exemption — it applies automatically to qualifying transactions without the need to file an individual exemptive relief request with Division staff. Besides being limited to all-cash, non-cross-border tender offers, the relief is subject to the following additional conditions for equity securities of reporting companies:

• The tender offer must be subject to the provisions of Regulation 14D or Rule 13e-4 under the Exchange Act.
• If subject to Regulation 14D (i.e., a third-party offer), the offer must be made pursuant to a negotiated merger agreement or similar business combination agreement, must be made for all outstanding securities of the subject class, and a Schedule 14D-9 must be filed and disseminated by the subject company no later than 5:30 p.m. Eastern time on the first business day following commencement.
• If subject to Rule 13e-4 (i.e., an issuer tender offer), the offer must be made for less than all outstanding securities of the subject class.
• The tender offer must be announced in a press release issued through a widely disseminated news or wire service by 10:00 a.m. Eastern time on the date of commencement, including basic terms of the offer and an active hyperlink to a website where security holders may access the offer materials.
• Any increase or decrease in the percentage of securities sought (other than acceptance of an additional amount not exceeding 2% of subject securities) or change in consideration must be communicated by press release or public announcement no later than 9:00 a.m. Eastern time on the fifth business day before expiration.
• Any other material change in the terms of the offer must be communicated no later than 9:00 a.m. Eastern time on the second business day before expiration.

The Order extends to all-cash tender offers for equity securities of non-reporting companies subject to the following key conditions:

• The tender offer must be for the equity securities of an issuer that does not have a class of securities registered under Section 12 of the Exchange Act and is not required to file reports pursuant to Section 15(d) of the Exchange Act.
• The offer must be made by the issuer of the securities sought or by the issuer’s wholly owned subsidiary.
• Similar notice requirements apply to changes in offer terms, with material changes communicated to holders no later than the fifth business day (for changes to consideration or percentage sought) or second business day (for other material changes) before expiration.