Definition
A maximum tender condition caps the number of shares the bidder will buy. If holders tender more than the maximum, accepted shares are allocated pro-rata under Rule 14d-8.
Why it matters
Used in:
- Partial tender offers — where the bidder seeks less than 100%
- Issuer tender offers / buybacks — where the company is using a finite cash budget
- Private-company employee tenders — where the buyer’s deployable capital sets the cap
Mechanics under oversubscription
If 1.5x the cap is tendered, every holder gets ~67% of their tendered shares accepted; the rest are returned. The exact arithmetic and any odd-lot preference are spelled out in the offer-to-purchase.