Definition
An odd-lot tender (or odd-lot preference) is a feature of some tender offers that gives priority acceptance to holders of fewer than 100 shares (“odd lots”). Odd-lot holders who tender all their shares are accepted in full, ahead of any pro-rata acceptance applied to round-lot holders.
Why it matters
Odd lots are expensive for retail holders to sell on the open market (round-lot commission economics). Issuer tender offers often include an odd-lot preference as a holder-friendly convenience and to clean up the cap table — companies prefer to maintain fewer record holders.
Mechanics
If the offer is oversubscribed:
- Odd-lot holders who tender all shares — accepted in full
- Round-lot holders — accepted pro-rata up to the cap
Distinction
An odd-lot tender is a feature of a regular tender offer. A mini-tender is the entire offer structure (under 5% of shares outstanding) and has nothing to do with odd lots.