SEC Cuts Minimum Tender Offer Period in Half for Equity Securities

Overview

On April 16, 2026, the SEC’s Division of Corporation Finance (the Division) issued an exemptive order that significantly reduces the time certain tender offers for equity securities must remain open. Effective immediately, qualifying tender offers may now remain open for as few as 10 business days—down from the standard 20-business-day minimum otherwise required under Rules 13e-4(f)(1)(i) and 14e-1(a) under the Securities Exchange Act of 1934 (the Exchange Act). The Division cited the need to address market inefficiencies, reflect technological advancements, and reduce unnecessary exposure to market fluctuations as the drivers behind this relief.

The exemptive order covers two categories of tender offers, both subject to a carefully structured set of conditions: (1) offers for equity securities of reporting companies and (2) offers for equity securities of nonreporting companies.

Relief for Tender Offers Involving Reporting Companies

The relief for tender offers for equity securities of reporting companies covers third-party tender offers and issuer self-tenders, respectively, under Regulation 14D and Rule 13e-4 under the Exchange Act.

Third-Party Offers under Regulation 14D

For third-party tender offers, the shortened 10-business-day period is available only when (i) the offer is made pursuant to the terms of a negotiated merger agreement or similar business combination agreement between the target company and the offeror, and (ii) the offer is made for all outstanding securities of the subject class. In addition, the target company must file and disseminate a Schedule 14D-9 no later than 5:30 p.m. Eastern time on the first business day following the commencement of the tender offer.

Issuer Self-Tenders under Rule 13e-4

For issuer self-tenders under Rule 13e-4, the abbreviated period is available when the offer is made for less than all outstanding securities of the subject class.

Conditions Applicable to All Reporting Tender Company Offers

Regardless of whether the tender offer is a third-party tender offer or an issuer self-tender, all of the following conditions must be satisfied:

• Cash-only consideration. The consideration offered must consist solely of cash at a fixed price.
• No going-private transactions. The offer must not be subject to Exchange Act Rule 13e-3 (i.e., it cannot be a going-private transaction).
• No cross-border exemptions. The offer must not be made in reliance on the cross-border exemptions under Exchange Act Rule 14d-1(d) or Exchange Act Rule 13e-4(i).
• No competing offers at launch. At the time the offer is publicly announced, the subject securities must not already be the subject of another pending or previously announced tender offer by a different offeror.
• Extension required if a competing offer emerges. If a competing tender offer is publicly announced after commencement, the initial offeror must extend its offer so that it remains open for at least 20 business days from the date it originally commenced.
• Press release with hyperlink at launch. The offer must be announced via a widely disseminated press release or wire service by 10:00 a.m. Eastern time on the commencement date, including basic terms (identity of offeror, class of securities, consideration, and expiration date) and an active hyperlink to a website where holders can access the tender offer materials.
• Early notice of price or percentage changes. Any increase or decrease in the percentage of securities sought (beyond a 2% de minimis threshold) or any change in the consideration offered must be publicly announced no later than 9:00 a.m. Eastern time on the fifth business day before expiration.
• Notice of other material changes. Any other material change in the terms of the offer must be publicly announced no later than 9:00 a.m. Eastern time on the second business day before expiration.

Relief for Tender Offers Involving Nonreporting Companies

The Division also granted relief for tender offers conducted by issuers that are not SEC reporting companies and tender offers conducted by wholly owned subsidiaries of such issuers for the issuer’s own securities.

As with reporting company tender offers, the consideration must consist solely of cash at a fixed price, and the same advance-notice requirements apply for changes to consideration or the percentage of securities sought (no later than 9:00 a.m. Eastern time on the fifth business day before expiration) and for other material changes (no later than 9:00 a.m. Eastern time on the second business day before expiration). Notably, unlike reporting company offers, this category does not require a widely disseminated press release at launch, reflecting the more limited public market for nonreporting company securities.

Important Reminders for Offerors

The exemptive order does not relax any other obligations under the federal securities laws. Offerors must remain mindful that all anti-fraud and anti-manipulation provisions continue to apply, including Sections 10(b) and 14(e) of the Exchange Act and the rules promulgated thereunder. The Division expressly noted that responsibility for compliance with all applicable federal securities laws rests with the offeror.