Definition
A creeping tender offer (also called a “creeping acquisition”) is the practice of building a controlling position in a target through a series of open-market or privately-negotiated purchases — sidestepping the formal tender-offer disclosure regime.
Limits
- Each crossing of 5% triggers a Schedule 13D / 13G filing with cooling-off and amendment obligations
- Acquiring shares “in connection with” a tender offer triggers Rule 14e-5’s prohibition on outside purchases
- The SEC has historically scrutinized accumulations that look “tender-like” — i.e., widespread, time-pressured solicitations of holders — and may treat them as tender offers requiring full Reg 14D compliance
Why it matters
Creeping tenders attract regulatory and litigation risk. The “Wellman factors” used by some courts evaluate whether a series of purchases constitutes a de facto tender offer requiring Williams Act disclosure.
Practical posture
Most modern bidders avoid the creeping path and use a formal tender offer once they cross meaningful thresholds.