Definition
A friendly tender offer is a tender offer launched with the support of the target board. Typically the bidder and target sign a merger agreement first, and the bidder then commences the tender offer at the price specified in the agreement.
Mechanics
- Target board recommends acceptance via Schedule 14D-9
- Often includes a top-up option to enable a short-form merger after a successful tender
- Conditions typically include the minimum tender threshold and regulatory approvals
Why it matters
The friendly tender / merger-agreement structure is the dominant deal architecture for U.S. public M&A. Compared to a one-step merger, the tender-offer-plus-back-end-merger structure can close faster (no shareholder vote required if the back-end is a short-form merger).
Distinction
A hostile tender offer is launched without target board support — the bidder appeals directly to shareholders, typically with no merger agreement in place.