On April 16, 2026, the Securities and Exchange Commission (the “SEC”) issued an exemptive order (the “Exemptive Order”) that cuts in half the minimum offering period for certain types of equity tender offers.  This relief would capture most negotiated, all-cash tender offers for U.S. public company acquisitions and will provide a powerful incentive for dealmakers to favor tender offers as the structure of choice for all-cash transactions. The Exemptive Order also provides relief to partial issuer tender offers by public and private companies, although, as discussed below, we believe it is less likely to have as significant an impact on market practice in this context.

Background

Rules 13e-4 and 14e-1 under the Securities Exchange Act of 1934 (the “Exchange Act”) generally require tender offers to remain open for at least 20 business days. Although the SEC has previously provided relief from this rule in a variety of circumstances, either through rulemaking (as in the case of certain cross-border tender offers) or as a matter of discretion (as in the case of no-action relief for debt tender offers), the 20 business day period has consistently applied to tender offers for the acquisition of U.S. public companies for the last 40 years.  

Under this historic regime, a two-step transaction structure—utilizing a tender offer followed by short-form “squeeze out” merger to acquire the remaining share—was already the structure that generally offered the fastest path to completing an all-cash acquisition of a U.S. public company. This was for two primary reasons. First, in a tender offer, the parties can file and mail definitive offer materials immediately, and any SEC review is typically conducted during the tender offer period.  By contrast, in a one-step merger, which entails a stockholder vote followed by a merger, the target must file a preliminary proxy statement at least 10 calendar days prior to filing and mailing the definitive proxy statement, and the mailing generally occurs at least 20 business days prior to the stockholder meeting that precedes the merger.¹ Second, in an all-cash tender offer, the 30 calendar day waiting period under the Hart-Scott-Rodino (“HSR”) Act is reduced to 15 calendar days.  

These timing gains were relatively modest, however, and not always enough to cause parties to utilize a tender offer in an all-cash transaction (even where regulatory clearances were not expected to extend the timeline).  As discussed further below, the additional potential timing gains available under the Exemptive Order provide a powerful incentive to revisit the factors influencing this decision and may trigger further adoption of the two-step structure in public company M&A. 

Negotiated All-Cash Offers for Public Companies

The Exemptive Order provides relief to third-party tender offers for equity securities subject to Regulation 14D under the Exchange Act (i.e., offers for the securities of a U.S. reporting company), allowing for a minimum initial offering period of 10 business days, instead of the standard 20 business days, if they meet the following criteria:

1. Negotiated transaction. The offer must be made pursuant to a negotiated merger agreement or similar business combination agreement between the target and the offeror.  Hostile tender offers do not qualify. 
2. All shares / all cash. The offer must be made for all outstanding securities of the subject class and the consideration must consist solely of cash at a fixed price.
3. Recommendation statement. The target’s Schedule 14D-9 (solicitation/ recommendation statement) must be filed and disseminated by 5:30 p.m. Eastern Time on the first business day after the commencement of the tender offer.
4. No going-private transactions. The tender offer must not be a “going private” transaction subject to Rule 13e-3.
5. No cross-border exemptions. The tender offer must not be made in reliance on the Tier II cross-border exemptions set forth in Rule 14d-1(d) or Rule 13e-4(i).
6. No competing tender offer at announcement. At the time of public announcement of the tender offer, the subject securities must not be subject to a previously announced or pending tender offer by another offeror.
7. Extension if a competing offer is announced. If a competing tender offer is publicly announced after commencement of a tender offer relying on this exemption, the initial tender offer must be extended so that it remains open for at least 20 business days from its commencement.
8. Public announcement; access to tender offer materials. The tender offer must be announced by 10 a.m. Eastern Time on the commencement date in a widely disseminated press release that includes the basic terms of the offer and an active hyperlink to a website where security holders may access the tender offer materials. 
9. Notice of price or size changes. Any change in the percentage of securities sought (other than an increase of 2% or less) or any change in the consideration offered must be publicly announced no later than 9 a.m. Eastern Time on the fifth business day before expiration of the offer.
10. Notice of other material changes. Any other material change to the terms of the tender offer must be publicly announced no later than 9 a.m. Eastern Time on the second business day before expiration of the offer.

Unless there is a bidding war, these criteria generally either track or require only minor modifications to standard market practice, so it should not be difficult for deal participants to satisfy the technical requirements for this relief.  Given the significant timing advantages and the fact that tender offers have already been proven to be a viable transaction structure, it seems likely that the Exemptive Order will have a significant impact on the public M&A market. 

Partial Issuer Tender Offers by Public and Private Companies

The Exemptive Order also provides similar relief for partial issuer tender offers for equity securities—allowing the same minimum initial offering period of 10 business days—with distinct criteria applying to public and private companies. 

Issuer tender offers for the equity securities of reporting companies subject to Rule 13e-4 of the Exchange Act qualify for relief if they are for less than all outstanding securities of the subject class, offer consideration consisting only of cash at a fixed price and are not a “going-private” transaction subject to Rule 13e-3. The criteria contemplated by items 5 through 10 in the list above for third-party tender offers also technically apply, although these are less likely to be relevant in the issuer tender offer context.  This relief may offer flexibility to public companies executing share buybacks that might make self-tenders a potentially more attractive alternative, in certain circumstances, to the safe harbor requirements under Rule 10b-18, accelerated share repurchase (ASR) programs or privately negotiated transactions.  However, the relief does not apply to certain buyback strategies where tender offers are already deployed, such as variants of Dutch auctions that do not entail a fixed price.   

Issuer tender offers for the equity securities of non-reporting companies (i.e., issuers that do not have a class of securities registered under Section 12 of the Exchange Act and are not required to file reports pursuant to Section 15(d) of the Exchange Act) qualify for relief if they are for less than all outstanding securities of the subject class, offer consideration consisting only of cash at a fixed price and any changes to the price or size of the offer or any other material changes must be communicated to security holders in advance, consistent with the notice requirements described under items 9 and 10 above.  The most likely application of this relief is to accelerate offers by private companies to buy back equity from their employees, which often triggers the tender offer rules. This occurs most often among later-stage emerging companies who may be seeking to provide liquidity to long-tenured employees without undergoing a broader strategic transaction like an IPO or a sale.

While the Exemptive Order offers potential benefits to public and private companies considering self-tenders, we believe this relief is less likely to cause significantly more widespread adoption of the tender offer structure for this purpose.  The extensive disclosure requirements associated with issuer tender offers are generally the most significant impediment to their use, rather than the minimum offering period, and the Exemptive Order does not provide any relief from these requirements. However, in situations where an issuer tender offer would otherwise be necessary, the Exemptive Order will provide welcome relief. 

Takeaways

By shaving 10 business days off the timeline for qualifying tender offers, the Exemptive Order presents public M&A deal participants with a very different calculus when deciding on an optimal structure.  Parties once looking at a timing advantage of roughly 10-14 days (on a typical timeline) may now be able to save almost a month by adopting a tender offer structure without significant changes to their disclosure obligations or the offer requirement more generally.

From the target’s perspective, the delta becomes more meaningful when considering deal risk and the time value of the transaction consideration to their shareholders.  From the buyer’s perspective, the accelerated process dramatically shortens the window for topping bids and may operate as a form of de facto deal protection because of the time pressure it puts on potential competing bidders. 

While there are many transactions that are structured as one-step mergers due to unavoidable delays associated with regulatory clearances and other closing conditions, or the anticipated need for more time to complete a shareholder solicitation process that is expected to be challenging (such as a target with a high percentage of “retail” ownership), there are others where parties have more control over whether or not they pursue the potential benefits of a tender offer. This is particularly true in transactions involving private equity buyers, who might have previously favored the one-step structure because it avoided complications in executing financing arrangements for leveraged buyout transactions.  These parties may face increased pressure from sellers, particularly in competitive auctions, to adopt a two-step structure (even if it entails more financing risk to the buyer), and larger institutions that are able to backstop the entire purchase price with an equity commitment may see an even greater competitive advantage in this scenario. 

The potential to shorten the window for topping bids so dramatically may also drive changes in deal planning and execution.  There may be more focus on accelerating the preparation of disclosure documents and HSR filings during the negotiation period to start the clock on the statutory offer and waiting periods as quickly as possible after signing.  It also remains to be seen whether such accelerated timeframes have any impact on the common law analysis of deal protections and pre-signing market checks. It is too early to predict all the ways in which the Exemptive Order may impact public M&A practice, but it is likely that its impact will be significant. 

Footnotes:

1. This 20 business day period is not a strict requirement for these transactions, but Note D.6 of Schedule 14A requires a proxy statement be sent to stockholders at least 20 business days prior to the date of the stockholder vote if any document other than an annual report required by Rule 14a-3(b) is incorporated by reference in the proxy statement. Parties typically adhere to this period (for a variety of reasons), but it is technically possible to accelerate the one-step transaction timeline by foregoing incorporation by reference.