SELF-TENDER DEFENSE

Self-Tender Defense is a kind of takeover defense to deflect a hostile bid. The Self-Tender Defense is where the target company for a takeover take on a tender offer for its own shares also known as a ‘self-tender’. Self-Tender Defense happens whenever the managers of the company to be taken over does not consent to the pending acquisition due to the fact that it sees the hostile bid as an opportunistic move. The target company looks at the hostile bidder as someone who undervalues their shares. The purpose of self-tender defense is to raise the cost of acquisition for the hostile bidder or diminish the appeal of the target company by acquiring more debt for the financing of the tender. This actions sometimes reach the point where the hostile bidder is given no other choice but to walk away.

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