Abstract

A "mini-tender offer" is a tender offer to buy less than 5% of a class of securities. Because § 14(d)(1) of the Securities Exchange Act of 1934 requires bidders to register only those tender offers that will result in beneficial ownership of more than 5% of a class of securities, a bidder can complete a mini-tender offer without registering the offer with the Securities and Exchange Commission. The increasing popularity of mini-tender offers has highlighted a gap in the federal tender offer rules. According to the SEC, mini-tender offers are not subject to the filing, disclosure and procedural requirements of § 14(d) of the 1934 Act and Regulation 14D thereof, but are subject to the 1934 Act's anti-fraud provisions of § 14(e) and Regulation 14E. Thus, offerees in a mini-tender offer are, absent any additional statutory or administrative assistance, denied certain protections of the tender offer rules, including proration and withdrawal rights.

This Article is an examination of the legalities of mini-tender offers and of the regulatory responses thereto, concluding that the SEC must take steps to bring mini-tender offers conclusively within the definition of tender offer for purposes of the Williams Act, and then must promulgate binding regulations to achieve the desired investor protections.

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