Quick Answer
Tender-offer regulation is anchored on three axes: which framework applies (the third-party tender offer rules, the universal tender offer rules, going-private rule, or issuer tender offer rule), which timing thresholds govern (20 business days minimum, 10 business days for price, percentage, or dealer's-soliciting-fee changes, 10 business days target response, 60-calendar-day withdrawal revival for third-party offers versus 40-business-day revival for issuer self-tenders, 3 business days prompt payment), and which document gets filed (Schedule TO for the bidder, Schedule 14D-9 for the target, Schedule TO-I for issuer self-tender, Schedule 13E-3 for going-private). Once a fact pattern is mapped against those three axes, the question's answer follows.
This synthesis section pulls the unit's most-tested facts into reference tables and reinforces the framework you should apply to any tender-offer question.
The Three-Axis Framework
Almost every tender-offer question on the exam can be solved by asking three questions in order.
Axis 1: Which Rules Apply?
| Fact Pattern | Rules |
|---|---|
| Third-party bidder, Exchange Act-registered equity, over 5% after consummation | Third-party tender offer rules (full procedural regime) PLUS the universal tender offer rules |
| Third-party bidder, but under 5% (mini-tender) | Universal tender offer rules only |
| Issuer tender for its own equity | Issuer tender offer rule (PLUS the universal tender offer rules) |
| Going-private transaction (issuer or affiliate, reasonable likelihood of dropping below 300 holders, terminating reporting, suspending reporting, or delisting) | Going-private rule plus the underlying form (TO-I or 14A) |
| Debt securities tender offer | Universal tender offer rules only (third-party tender offer rules apply only to registered equity) |
Axis 2: What Timing Applies?
| Event | Period |
|---|---|
| Minimum offer period | 20 business days (default; narrow 10-business-day exemption per SEC order for a negotiated merger agreement, all outstanding securities, fixed cash-only price; 60 calendar days for a qualifying roll-up offer) |
| Extension on price, percentage, or dealer's-soliciting-fee change | At least 10 business days from notice (a ≤2% acceptance increase does not count as a triggering change) |
| Extension on other material change | Prompt dissemination; no fixed day count under the general rule |
| Extending an offer | Requires a public announcement disclosing securities deposited to date |
| Target response deadline (Schedule 14D-9) | 10 business days from commencement; a later material change to the position must be promptly disclosed |
| Withdrawal rights (third-party offer) | Throughout open offer; revive after 60 calendar days |
| Withdrawal rights (issuer self-tender) | Throughout open offer; revive after 40 business days if not yet accepted |
| Prompt payment | Generally 3 business days |
| Subsequent offering period | Minimum 3 business days; only for an offer for all outstanding securities of the class; no withdrawal rights |
Axis 3: What Document Gets Filed?
| Document | Filer | Trigger |
|---|---|---|
| Schedule TO | Third-party bidder | Third-party tender offer for Exchange Act-registered equity |
| Schedule TO-I | Issuer or an affiliate of the issuer | Issuer self-tender (also requires filing written communications from the first public announcement, and a 10-business-day-after-termination purchase ban) |
| Schedule 13E-3 | Issuer or affiliate | Going-private transaction (filed in addition to underlying form) |
| Schedule 14D-9 | Target | Target board's position statement (within 10 business days) |
Exam Tip: Gotchas
- The three axes can be answered independently. A question can ask "which regulation applies" without you needing to know the timing or the filing answer. Get good at isolating which axis the question is testing.
Equal-Treatment and Anti-Trading Rules at a Glance
| Rule | What It Requires | Key Detail |
|---|---|---|
| All-holders rule | Offer open to all security holders of the class | Applies per class; common-only tender is OK if preferred is a separate class; a state-prohibited offer may exclude that state's holders after a good-faith compliance effort |
| Best-price rule | Highest consideration paid to any holder flows to every holder | Compensation carve-out: arrangements approved by independent committee are not tender consideration; multiple consideration types are permitted with equal election rights |
| Tender-offer insider trading rule | No trading or tipping on material nonpublic information about a tender offer | NO fiduciary breach required (parity-of-information rule); broader than the general anti-fraud insider trading regime in reach |
| Net-long rule | Cannot tender more shares than net long position in partial tender | Long 10,000 / short 4,000 = net long 6,000 maximum tender |
| Outside-purchase prohibition | Bidder and covered persons cannot buy subject security outside offer during offer window | Covered persons include dealer-managers, contingent-fee advisors, persons acting in concert |
Common Exam Patterns
The exam writes a handful of pattern questions repeatedly. Recognizing the pattern shortcuts the analysis.
Pattern 1: Third-Party vs Universal Scope
The question gives a tender offer fact pattern (debt securities, mini-tender, issuer self-tender, registered equity) and asks which rules apply.
- The third-party tender offer rules apply only to third-party offers for Exchange Act-registered equity when the bidder will own over 5% after consummation
- The universal tender offer rules apply to everything else (and to third-party-rule offers too)
- Anti-fraud, 20-business-day minimum, withdrawal rights, prompt payment all sit in the universal tender offer rules and apply universally
Pattern 2: Target Response Timing
The question describes a target board reacting to a tender offer and asks when the board must respond.
- 10 business days from commencement
- Four permissible positions: recommend acceptance, recommend rejection, neutral, or unable to take a position
- Whichever position the board takes, the statement must include the reason(s) for it; neutral or unable-to-take-a-position responses cannot simply punt without stating why
- Stop-look-listen notice buys time WITHIN the 10-business-day window but does not replace the Schedule 14D-9 obligation
Pattern 3: The Tender-Offer Insider Trading Rule vs the General Anti-Fraud Regime
The question presents an insider trading fact pattern in the tender-offer context (typically the financial-printer fact pattern from Chiarella) and asks which rule reaches the conduct.
- The tender-offer rule does NOT require a fiduciary breach
- The general anti-fraud insider trading regime does
- The 1980 SEC adoption of the tender-offer rule was specifically designed to fill the Chiarella gap
Pattern 4: Going-Private vs Issuer Self-Tender
The question describes an issuer transaction and asks which schedule gets filed.
- Issuer self-tender alone → Schedule TO-I (only)
- Issuer self-tender that takes the company below 300 holders or off-exchange → Schedule TO-I AND Schedule 13E-3
- Cash-out merger that takes the company private → Schedule 14A AND Schedule 13E-3
Pattern 5: Subsequent Period vs Extension
The question describes a bidder seeking to keep an offer open past the initial period.
- Extension: Initial offer still open; triggered by material change in terms; withdrawal rights continue; 10 business days for price, percentage, or dealer's-soliciting-fee changes; prompt dissemination (no fixed day count) for other material changes
- Subsequent offering period: Initial offer closed and bidder has accepted shares; minimum 3 business days at same price; only for an offer for all outstanding securities of the class; NO withdrawal rights; no guaranteed-delivery
Exam Tip: Gotchas
- The five patterns above account for most of the rule-mechanics questions in this unit. When a question feels confusing, ask which pattern it is testing; the answer usually follows.
How the Framework Hangs Together
The Williams Act framework follows a clean cause-and-effect sequence:
- Williams Act (1968) creates the disclosure-and-process regime
- The third-party and universal tender offer rules split the rules by scope (registered equity over 5% vs everything)
- Schedule TO (bidder) and Schedule 14D-9 (target) are the disclosure vehicles
- Timing rules (20 business days, 10-day extension, withdrawal rights, prompt payment) protect shareholder evaluation time
- Equal-treatment rules (all-holders, best-price) prevent side deals
- Tender-offer insider trading rule prevents trading advantages
- Going-private rule and issuer tender offer rule layer in additional disclosure for special cases
- Mini-tender and subsequent offering period are edge cases that test the boundaries of the framework
Memory Aid: WAGS Bids: Williams Act, All-holders rule, Going-private, Schedule TO. The Williams Act creates the regime; the all-holders rule prevents discrimination; the going-private rule covers the issuer-driven freeze-out; Schedule TO is the master disclosure document.
What Should You Check on Exam Day?
- Work the three axes in order: which rules apply, what timing governs, and which document gets filed.
- Keep the business-day figures (20, 10, 3, and the issuer self-tender's 40) separate from the one calendar-day figure (the third-party offer's 60-day withdrawal-rights revival); do not swap the third-party and issuer self-tender revival periods.
- Match each fact pattern to one of the five common exam patterns before reasoning from scratch.
- Recheck the 5% threshold (mini-tender vs third-party rules) against post-consummation ownership, including any pre-existing stake.
- Confirm a subsequent offering period is only available for an offer covering all outstanding securities of the class before applying its mechanics to a partial-offer fact pattern.