T° TenderOffer.co
Comparison

Tender offer vs share repurchase

A tender offer is a structured, defined-window buyback. An open-market repurchase is a continuous, opportunistic buyback under Rule 10b-18.

Attribute Tender offer (issuer) Open-market share repurchase
Structure Defined window, fixed price (or auction range), all-holders eligibility Continuous opportunistic purchases on the open market
Pricing Single fixed price (or clearing price in Dutch auction) Prevailing market price at time of each trade
Equal treatment Required — same price to all accepting holders No — depends on which holders happen to be selling
Disclosure Schedule TO-I + offer-to-purchase Average price + total dollars in periodic 10-Q/10-K disclosure
Regulatory frame Rule 13e-4 Rule 10b-18 safe harbor
Timing ≥20 business days, then settlement Continuous; can run for years under one board authorization
Premium typical 5–15% over market price 0% — trades at market
Use case Large one-time capital return; activist appeasement; pre-IPO employee liquidity Steady-state capital return; offsetting equity comp dilution

When the comparison matters

Public companies returning capital choose between three buyback structures: open-market repurchases under Rule 10b-18 (the default), Dutch-auction tender offers, and fixed-price tender offers. The choice depends on speed, signal, and how much premium the company is willing to pay above market.

Why issuer tenders sometimes beat open-market

  • Signal — a tender at a premium is a stronger conviction signal than dribbling out open-market purchases
  • Speed — clears a large dollar amount in 20–30 days vs. months or years
  • Equal treatment — every accepting shareholder gets the same price
  • Strategic fit — useful for one-time situations (special dividend alternative, post-spinoff cap-stack reset)

Why open-market still dominates for most buybacks

Lower cost (no premium), no execution overhead, flexibility to pause based on market conditions, and a board-approved authorization that can run for years.

Guides

Glossary