What Are the SEC Tender Offer Rules? How They Work and Examples

The rules come from the Williams Act. In 1968 it added the tender offer provisions to Sections 13 and 14 of the Securities Exchange Act, the US law on securities trading. The rules work in layers. Which layers apply depends on who is buying and whether the company reports to the SEC. The page on what a tender offer is explains what a tender is and how a seller experiences one. This page is the rulebook.

Section 14(e) and Regulation 14E

Applies to every tender offer, for any security, registered or not, including a private company’s. It covers minimum periods, prompt payment, the target’s duty to state its position and anti-fraud.

Rule 13e-4

Covers tender offers by a company, or its affiliate, for its own equity. It applies only if the company has a class registered under Section 12, reports under Section 15(d) or is a registered closed-end fund.

Regulation 14D

Covers third-party offers for a class registered under Section 12 that would take the bidder above 5%. This is the takeover regime.

Schedule TO

The SEC filing that goes with an offer under Rule 13e-4 or Regulation 14D. A private company does not file one.

Is It a Tender Offer? The Wellman Test

Neither the statute nor the rules define “tender offer.” Courts generally apply the eight-factor test from Wellman v. Dickinson (1979). In the SEC’s words, the transaction (1) involves active and widespread solicitation of holders and (2) seeks a substantial percentage of the stock. It (3) offers a premium over the market price and (4) has fixed terms with no room to negotiate. It (5) is conditioned on a fixed number of shares being tendered and (6) is open for a limited period. Finally, it (7) pressures holders to respond and (8) would result in the bidder acquiring a substantial amount of securities. Not all eight need be present. Some courts ask a different question: do the sellers need the protection of the rules? (Hanson Trust v. SCM, 1985).

A business day is any day except Saturday, Sunday or a federal holiday. It runs from 12:01 a.m. to midnight Eastern time, and the day the offer starts counts as day one (Rule 14d-1(g)(3)). So the tender offer window closes no earlier than midnight Eastern on the 20th business day.

• Change in price or sizeRaising or lowering the price, the percentage sought or the dealer’s soliciting fee requires at least 10 business days left after notice. Accepting up to 2% more shares does not count as a change.
• ExtensionUnder the tender offer extension rules, the buyer must issue a public notice by 9:00 a.m. Eastern on the next business day after the scheduled expiration. The notice gives the approximate number of shares tendered so far.
• PaymentPay, or return the shares, promptly after the offer ends or is withdrawn.
• WithdrawalFor reporting issuers, holders can withdraw while the offer is open, and after 40 business days if their shares have not yet been accepted.

When the company reports to the SEC, the tender offer requirements grow. The offer is filed on Schedule TO and amended for material changes and for the final result. Two equal-treatment rules also apply. The offer must be open to all holders of the class. And each holder must be paid the highest price paid to any other holder. These are the all-holders and best-price rules (Rule 13e-4(f)(8) for issuers, Rule 14d-10(a) for third parties).

Best price has a deliberate exception. Under Rule 14d-10(d), a buyer may agree on employment, severance or benefit pay with a holder who is also an employee. The pay must be for services, must not be calculated on the shares tendered and must be approved by the compensation committee. Rule 13e-4 also exempts odd-lot offers to holders of fewer than 100 shares. It exempts cross-border offers where US holders are a small minority, too. In a third-party offer, the company must tell holders within 10 business days whether it recommends the offer, rejects it or is neutral (Rule 14e-2).

The SEC can exempt offers from Rule 14e-1 and Rule 13e-4. Its staff has done so for decades for particular kinds of offer. A tender offer exemptive order sets conditions. An offer that meets them follows the order in place of the rule it exempts from.

Reporting companies (April 16, 2026)

A cash, fixed-price offer for equity may run 10 business days. It can be a self-tender for less than the whole class. It can also be a negotiated offer for the whole class, with the target’s response filed by 5:30 p.m. Eastern the next business day. A press release with the terms and a link to the documents must go out by 10:00 a.m. Eastern on launch day.

Private companies (April 16, 2026)

A company that neither registers nor reports may run its own cash, fixed-price offer for 10 business days. The same applies to an offer by its wholly owned subsidiary. A change in price or size must reach holders by 9:00 a.m. Eastern on the fifth business day before expiry. Any other material change must reach them by the second.

Option exchanges (March 21, 2001)

A company eligible for Form S-8 may offer to exchange employee options for compensatory purposes without the all-holders and best-price rules. It must explain the offer’s essential features.

Private-company holders will notice the 2026 order most. Tender windows can now last two weeks instead of four. The order changes timing only. The anti-fraud duties in Sections 10(b) and 14(e) apply in full. The SEC staff also reserved the right to modify or withdraw the relief (SEC, 2026).

Here is the tender offer process for a private company, in the order the rules apply. The employee side (elections, proration and exercise costs) is on the tender offer page.

1. 1.0
   Decide whether it is a tender offerA fixed price offered to every eligible holder for a set window meets several Wellman factors. Most companies treat a liquidity program as a tender and follow Regulation 14E.
2. 2.0
   Choose the windowAt least 20 business days. The window can be 10 if the company itself buys for cash at a fixed price and meets the April 2026 order’s notice conditions. Third-party buyers stay on 20.
3. 3.0
   Write the offer documentNo Schedule TO is needed. But Section 14(e) forbids any untrue statement or misleading omission of a material fact. The offer document carries the disclosure.
4. 4.0
   Set the company’s positionIf outside investors are the buyers, the company states within 10 business days whether it recommends the offer.
5. 5.0
   Check antitrustA buyer whose holding would cross the 2026 Hart-Scott-Rodino (HSR) antitrust threshold of $133.9M may need to file and wait before buying.
6. 6.0
   Manage changesAny change in price or size restarts a 10-business-day minimum. Under the order, the fifth-day notice rule applies instead.
7. 7.0
   Close and payAccept, prorate if oversubscribed, and pay or return shares promptly.

Offer closes too early

Count business days from the launch day and drop federal holidays. The offer expires at midnight Eastern, so a 5 p.m. close is too early.

Price changed without time left

Build the timetable so a change still leaves 10 business days, or meets the fifth-day notice under the order.

Misleading offer document

Disclose what a seller needs: the price basis, the company’s recent financing, tax and withholding. Section 14(e) applies to private offers.

Relying on the order without meeting it

It covers only the company’s own cash, fixed-price offers. A third-party tender or a share-for-share offer stays on 20 days.

HSR missed by a large buyer

Test each buyer’s resulting holding against the threshold before launch. A cash tender has a 15-day waiting period.

The Hart-Scott-Rodino Act is a US antitrust law. It is not an SEC rule, but it decides when a large buyer may close. A buyer may have to file and wait if its holding after the offer would exceed the size-of-transaction threshold. That threshold is $133.9M for 2026, up from $126.4M, a rise of 6% (FTC, 2026). The Act’s other size tests and exemptions also apply.

For a cash tender offer, HSR runs faster than for a merger. The waiting period is 15 days instead of 30. A second request is the regulator’s demand for more information. After one, the wait can be extended by 10 days for a cash tender and by 30 days for a merger (15 U.S.C. 18a). The clock starts when the buyer files. The company must file its own notice within 10 calendar days of receiving the buyer’s notice of the filing (16 CFR 801.30). Most employee tenders are far below the threshold. HSR matters when a single investor buys a large block in a third-party tender.

Common Mistakes with Tender Offer Rules

• Assuming private means unregulatedRegulation 14E applies to a private company’s tender, including the anti-fraud rule.
• Counting calendar daysThe tender offer timing rules run in business days, with the launch day included and federal holidays excluded.
• Treating the 10-day order as generalIt covers specific offers on specific conditions. Read the conditions before shortening the window.
• Forgetting the extension noticeAn extension needs a public notice by 9:00 a.m. Eastern the next business day.
• Ignoring antitrustA large buyer in a cash tender has its own 15-day HSR clock.

Tender offer

An offer to many holders to buy their shares at a set price within a set window.

Regulation 14E

SEC rules that apply to every tender offer, public or private: minimum periods, prompt payment, the target’s position and anti-fraud.

Reporting company

A company with a class of securities registered under the Exchange Act, or one that files reports under it.

Rule 13e-4

The issuer tender offer rule for reporting companies: Schedule TO, withdrawal rights, all-holders and best price.

Schedule TO

The SEC filing that goes with a tender offer under Rule 13e-4 or Regulation 14D.

Business day

Any day except Saturday, Sunday or a federal holiday, from 12:01 a.m. to midnight Eastern. The launch day counts.

All-holders and best-price rules

The offer must be open to every holder of the class, and each must receive the highest price paid to anyone.

Exemptive order

SEC relief that lets offers meeting stated conditions depart from a rule.

Wellman test

The eight factors courts use to decide whether a purchase program is a tender offer.

HSR waiting period

The antitrust pause before a large acquisition can close. It lasts 15 days for a cash tender offer.

Every rule and figure was checked against the primary source on October 2, 2026. The calendar example is illustrative. Rules are cited for the United States. Other jurisdictions run their own takeover and buyback codes.