SEC Exemptive Order Reduces Minimum Offering Period for Certain Equity Tender Offers to 10 Business Days

On April 16, 2026, the Division of Corporation Finance (the “Division”) of the U.S. Securities and Exchange Commission issued an exemptive order (the “Order”), effective upon issuance, permitting certain eligible equity tender offers to remain open for a minimum of 10 business days instead of the usual 20 business days required under Rules 13e-4(f)(1)(i) and 14e-1(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).

The Order replaces the Division’s prior practice of granting relief to shorten tender offer periods on a case-by-case basis through individual exemptive orders and no-action letters with a standardized framework that permits certain tender offers to proceed with a 10-business-day minimum offer period. The Division states that this framework aims to address market inefficiencies, better reflect technological advancements, and reduce exposure to market fluctuations, while remaining consistent with investor protection goals.

The Order establishes separate eligibility criteria for tender offers involving (i) reporting companies and (ii) non-reporting companies.

Reporting Company Tender Offers

The minimum offering period may be reduced to 10 business days for tender offers for equity securities involving reporting companies if:

• the tender offer is subject to Regulation 14D or Rule 13e-4 under the Exchange Act;
  • tender offers made subject to Regulation 14D (i) must be made pursuant to the terms of a negotiated merger agreement or similar business combination agreement between the subject company and the offeror, (ii) must be made for all outstanding securities of the subject class, and (iii) require a Schedule 14D-9 to be filed and disseminated by the subject company no later than 5:30 p.m. Eastern time on the first business day following the date of commencement of the tender offer;
  • tender offers made subject to Rule 13e-4 under the Exchange Act must be made for less than all outstanding securities of the subject class;
• the tender offer consideration consists of only cash at a fixed price;
• the tender offer is not subject to Rule 13e-3 under the Exchange Act, which governs going-private transactions;
• the tender offer is not made in reliance on the cross-border exemptions set forth in Rule 14d-1(d) or Rule 13e-4(i) under the Exchange Act;
• at the public announcement of the tender offer, the subject securities are not the subject of a previously announced or pending tender offer by another offeror. If another offer for the subject securities is publicly announced after the commencement of the initial offer made in reliance on the relief provided in the Order, the initial offer must be extended so that it is open for at least 20 business days from the date the initial offer commenced;
• the tender offer is announced in a press release issued through a widely disseminated news or wire service, which includes the basic terms of the offer (such as the identity of the offeror, the class of equity security sought to be purchased, the amount of consideration offered, and the expiration date of the offer), and contains an active hyperlink to a website address where security holders may access the tender offer materials, letter of transmittal (if any), and any other documents relating to the offer, in each case by 10:00 a.m. Eastern time on the date that the tender offer commences;
• any (i) increase or decrease in the percentage of the subject securities sought in the tender offer, other than the acceptance for payment of an additional amount of securities not to exceed two percent of the subject securities, or (ii) change in the consideration offered, is communicated in each case by press release or other public announcement that is widely disseminated no later than 9:00 a.m. Eastern time on the fifth business day before expiration of the offer; and
• any other material change in the terms of the tender offer is communicated by press release or other public announcement that is widely disseminated no later than 9:00 a.m. Eastern time on the second business day before expiration of the offer.

Non-Reporting Company Tender Offers

The minimum offering period may be reduced to 10 business days for tender offers for equity securities involving non-reporting companies if:

• the tender offer is made for the equity securities of an issuer that (i) has no class of securities registered under Section 12 of the Exchange Act and (ii) is not required to file reports under Section 15(d) of the Exchange Act;
• the tender offer is made by the issuer or by its wholly-owned subsidiary;
• the tender offer consideration consists of only cash at a fixed price;
• any (i) increase or decrease in the percentage of the subject securities sought in the tender offer, other than the acceptance for payment of an additional amount of securities not to exceed two percent of the subject securities, or (ii) change in the consideration offered, is communicated in each case by notice to holders of the subject securities no later than 9:00 a.m. Eastern time on the fifth business day before expiration of the offer; and
• any other material change in the terms of the tender offer is communicated by notice to holders of the subject securities no later than 9:00 a.m. Eastern time on the second business day before expiration of the offer. 

Practical Guidance

For acquisitions of public companies, acquirors now have an additional arrow in the quiver: enhanced speed. Long viewed as the antidote for the lengthy, arduous one-step merger process of calling special meetings and waiting through notice periods for target company shareholders to approve an acquisition, two-step cash tender offers can now be used by acquirors to reduce the length of time between signing of a definitive agreement and closing in an attempt to deliver greater deal certainty.

As the Order looks to mainly assist “plain vanilla” acquisitions (e.g., tender offers for cash in non-contested, arm’s-length negotiated deals), in such scenarios, counsel for both acquirors and targets should work together, and with their respective clients, to prepare the Schedule TO and Schedule 14D-9 as soon as possible in the negotiation process so as to be ready to launch the tender offer quickly after the signing of the definitive agreement. What was already a shortened process compared to a one-step merger may now be condensed to as little as two-and-a-half to three weeks from the signing of the definitive agreement if there are no antitrust-related or other closing conditions requiring a delay.

Given this reduction of time in the tender process, we believe we will see many more acquisitions of public companies through a two-step tender offer process in the future.