T° TenderOffer.co
Comparison

Issuer tender offer vs third-party tender offer

Issuer tenders are funded by the company itself (Rule 13e-4); third-party tenders are funded by an outside acquirer (Reg 14D).

Attribute Issuer tender offer Third-party tender offer
Buyer The issuer itself An outside party (strategic or financial)
Source of funds Company cash (or company debt) Bidder's cash or debt financing
Primary U.S. regulatory frame Rule 13e-4 (issuer tender) Regulation 14D
SEC filing Schedule TO-I Schedule TO-T
Typical purpose Capital return / share retirement; private-company employee liquidity using company cash Acquisition of control; private-company employee liquidity funded by outside investors
Effect on outstanding shares Decreases (shares retired or treasury) Unchanged (shares change hands)
Effect on company cash Decreases Unchanged
Tax treatment for sellers §302 framework — risk of dividend treatment if safe harbors not met Generally a sale taxable as a capital transaction
Going-private overlay Rule 13e-3 if going-private criteria met Rule 13e-3 if buyer is an affiliate; otherwise no

When the comparison matters

This is one of the first questions on any tender-offer mandate. The identity of the buyer drives:

  • The legal frame (Rule 13e-4 vs. Reg 14D)
  • The tax outcome for sellers
  • Whether the company’s balance sheet is affected
  • Whether the offer counts as a buyback

Practical posture

  • Public-company buybacks structured as tenders — issuer tender offers under Rule 13e-4
  • Public-company M&A — almost always third-party tender offers
  • Private-company employee liquidity — historically third-party (outside investor funds the secondary leg); some companies now mix in a corporate-funded portion alongside the third-party leg

Hybrid structures

Modern private-company programs (Stripe 2026, for example) sometimes combine both: a third-party investor takes most of the secondary, with the issuer also repurchasing a portion. The combined structure adds complexity but lets the company adjust the cap-table outcome more precisely.

Guides

Glossary