CORPORATE ACQUISITION by TENDER OFFER * ARTRUBR Fimsore1m, JR.T &
University of Pennsylvania Law Review FOUNDED 1852 Formerly American Law Register VOL. 115 JANUARY 1967 No. 3 CORPORATE ACQUISITION BY TENDER OFFER * ARTRUBR FimsoRE1m, JR.t & ROBEIT H. MtN~imxum tt The technique of acquiring control of a corporation by making a public offer to purchase a part of the corporation's stock at a fixed price-usually in cash and representing a premium above market-has been widely used in the United States in recent years. In 1965 there were twenty-nine cash tender offers to acquire control involving com- panies listed on the New York Stock Exchange and fifteen involving companies listed on the American Stock Exchange. In 1960 there were only eight such offers involving companies listed on both such exchanges.' The Investment Dealer's Digest reported thirty-two cash tender offers for the first six months of 1966.2 The increasing use of tender offers coincides with a period in which combinations of American businesses have been prevalent. These combinations are accomplished through merger, consolidation or acquisition of assets for stock or cash.3 Tender offers are another technique for creating * This article bears a date of November 26, 1966. t B.A. 1953, LL.B. 1958, Yale University. Member, New York Bar. t" Professor of Law, University of Pennsylvania. B.A. 1954, LL.B. 1957, Harvard University. Member, New York Bar. I Cohen, A Note o Takeover Bids and Corporate Purchases of Stock, 22 Bus. LAW. 149 (1966). 2 Investment Dealers' Digest-Corporate Financing Directory, pp. 78-79, Aug. 15, 1966. 3 Darrell, The Use of Reorganization Techniques in Corporate Acquisitions, 70 H~Av.
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