Definition
Tendering is the formal mechanism by which a shareholder elects to sell shares into a tender offer. The election is communicated via:
- A letter of transmittal (for direct registered holders) submitted to the depositary
- Broker instructions (for street-name holders) communicated to the broker, who tenders on the holder’s behalf via DTC
Mechanics
- Tendering is a binding offer to sell at the offer price, subject to withdrawal rights
- Tendered shares are held by the depositary until acceptance and settlement
- Until the bidder accepts, the holder retains beneficial ownership and can still withdraw
Common pitfalls
- Missing the deadline because broker cutoffs are typically earlier than the formal expiration time
- Failing to satisfy guaranteed-delivery requirements when physical certificates aren’t immediately available
- Tendering more shares than you hold — typically rejected by the depositary