Definition
A front-end loaded offer is a two-tier tender offer where:
- Front end — high cash price for the controlling stake
- Back end — lower-value consideration (cash or non-cash) for the remaining minority
Why it matters
Front-end loading creates structural pressure for shareholders to tender — those who don’t risk being squeezed out at the lower back-end price. It is the structural definition of a coercive tender offer.
Modern relevance
State fair-price statutes and SEC rules largely killed front-end loading in U.S. public-company tenders by the late 1980s. Modern friendly tenders use uniform pricing front-to-back; the “loaded” structure survives mainly as a textbook contrast.