SEC Exemptive Order Permits 10‑Business Day Offer Periods for Certain Equity Tender Offers

Summary

• SEC staff grants exemptive relief permitting specified equity tender offers to remain open for at least 10, rather than 20, business days
• Relief is available for both reporting and non‑reporting companies, subject to detailed conditions on offer structure, disclosure and communications
• Offerors must continue to comply with all applicable federal securities laws, including, but not limited to, the anti‑fraud and anti‑manipulation provisions thereof

Background

Rules 13e‑4(f)(1)(i) and 14e‑1(a) under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), generally require tender offers to be held open for a minimum of 20 business days. Historically, the Division of Corporation Finance (the “Division”) of the U.S. Securities and Exchange Commission (the “SEC”) has provided exemptive and no‑action relief for abbreviated offering periods in certain contexts, particularly in relation to debt tender offers (i.e., a tender offer to purchase debt securities, such as bonds or notes).

On April 16, 2026, acting under delegated authority, the Division issued an exemptive order (the “Exemptive Order”) providing additional flexibility to shorten the minimum tender offer period to 10 business days for specified tender offers for equity securities (e.g., stocks and warrants).¹The Exemptive Order can be found here. The Division’s stated objectives are to address market inefficiencies, better reflect technological developments, and reduce exposure to market volatility, while remaining consistent with investor protection goals.

The relief applies to tender offers for equity securities of both reporting companies and non‑reporting companies, provided the conditions summarized below are satisfied. 

Tender Offers for Equity Securities of Reporting Companies

For reporting companies, the Division grants exemptions from Exchange Act Rules 13e‑4(f)(1) and 14e‑1(a) and (b) to permit a tender offer for any class of equity security to remain open for a minimum offering period of 10 business days, if the following conditions are met:

• Regulatory framework:
  • The tender offer is subject to Regulation 14D or Rule 13e‑4 under the Exchange Act.
     
• Structure for third‑party offers (Regulation 14D offers):
  • The offer is made pursuant to a negotiated merger agreement or similar business combination agreement between the subject company and the offeror;
  • The offer is made for all outstanding securities of the subject class; and
  • The subject company files and disseminates a Schedule 14D‑9 no later than 5:30 p.m. Eastern time on the first business day following commencement of the tender offer.
    
    
• Structure for issuer tender offers (Rule 13e‑4 offers):
  • The offer is made for less than all outstanding securities of the subject class.
    
    
• Form of consideration:
  • The consideration consists solely of cash at a fixed price.
    
    
• Excluded transactions:
  • The tender offer is not subject to Rule 13e‑3 (going‑private transactions) under the Exchange Act; and
  • The tender offer is not made in reliance on the cross‑border exemptions in Rules 14d‑1(d) or 13e‑4(i) under the Exchange Act.
    
    
• Competing offers:
  • At the time of public announcement of the tender offer, the subject securities are not the subject of a previously announced or pending tender offer by another offeror; and
  • If another tender offer for the subject securities is publicly announced after commencement of an initial tender offer relying on this relief, the initial offer must be extended so that it remains open for at least 20 business days from its original commencement date.
    
    
• Initial public announcement and access to materials:
  • The tender offer is announced in a press release issued through a widely disseminated news or wire service by 10:00 a.m. Eastern time on the date of commencement;
  • The press release includes the basic terms of the offer (identity of the offeror, class of equity security sought, amount of consideration, and expiration date); and
  • The press release contains an active hyperlink to a website where security holders can access the tender offer materials, letter of transmittal (if any), and any other documents relating to the offer.
    
    
• Changes in percentage sought or consideration:
  • Any (i) increase or decrease in the percentage of securities sought (other than acceptance of no more than an additional 2% of the subject securities), or (ii) change in the consideration offered, must be communicated by press release or other widely disseminated public announcement no later than 9:00 a.m. Eastern time on the fifth business day before expiration of the offer.
    
    
• Other material changes:
  • Any other material change in the terms of the tender offer must be communicated by press release or other widely disseminated public announcement no later than 9:00 a.m. Eastern time on the second business day before expiration of the offer.

Tender Offers for Equity Securities of Non‑Reporting Companies

For non‑reporting issuers (such as private companies, which have not yet gone public, and which may be engaging in self-tenders as a liquidity mechanism for employees and investors), the Division grants exemptions from Exchange Act Rule 14e‑1(a) and (b) to permit a tender offer for any class of equity security to remain open for a minimum offering period of 10 business days, if the following conditions are met:

• Non‑reporting status of issuer:
  • The tender offer is for equity securities of an issuer that (i) does not have a class of securities registered under Section 12 of the Exchange Act and (ii) is not required to file reports pursuant to Section 15(d) of the Exchange Act.
    
    
• Identity of offeror:
  • The tender offer is made by the issuer of the securities sought, or by the issuer’s wholly‑owned subsidiary for the issuer’s securities.
    
    
• Form of consideration:
  • The consideration consists solely of cash at a fixed price.
    
    
• Changes in percentage sought or consideration:
  • Any (i) increase or decrease in the percentage of securities sought (other than acceptance of no more than an additional 2% of the subject securities), or (ii) change in the consideration offered, must be communicated 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.
    
    
• Other material changes:
  • Any other material change in the terms of the tender offer must be 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.

Ongoing Compliance

The exemptions from Rules 13e‑4(f)(1) and 14e‑1(a) and (b) under the Exchange Act are expressly conditioned on compliance with the requirements set out in the Exemptive Order and summarized above.

Offerors remain responsible for compliance with all applicable provisions of the federal securities laws, including the anti‑fraud and anti‑manipulation provisions of Sections 10(b) and 14(e) of the Exchange Act and the rules thereunder. The Exemptive Order does not address, and the Division explicitly states that it does not express any view on, any other legal issues a tender offer may raise, including the adequacy of disclosure or the applicability of other federal or state laws.

Practical Implications of the Exemptive Order

Importantly, the Exemptive Order has the potential to significantly impact the timing and execution of two-step cash mergers (e.g., a tender offer followed by a merger pursuant to Section 251(h) of the Delaware General Corporation Law). By shortening the first step from 20 business days to 10, such transactions (which, prior to the Exemptive Order, could be expected to take at least four weeks to close) could potentially be completed on an accelerated time scale (perhaps as little as approximately two weeks), assuming that the simple majority threshold needed to reach the second step is crossed in the tender offer. This provides greater deal execution certainty to merging parties by reducing the time period in which an interloper can try to jump the deal, and reduces carrying costs of committed financing arrangements.  The parties, however, will need to be mindful of fiduciary duties and how “fiduciary outs” will work, as well as the risk of subsequent litigation with respect to public deals. The parties will need to carefully consider the impact of the shorter offering period on these points as they draft and negotiate the merger agreement.

Particularly from the perspective of a target, because of the shorter offering period and the timing requirements for public announcements, more of the work for the transaction (such as the preparation of Schedule 14D-9, the determination by the target board of its recommendation to the shareholders, and the work by the target’s financial advisers on their fairness opinions) will need to be front-loaded.

A shorter transaction timeline may also be beneficial, whether in transactions involving reporting companies or non-reporting companies, by potentially reducing the risk that the valuation of the equity securities may change during the offering period.  In addition, private companies conducting liquidity programs – like an option award buyback – can effectuate tender offers in half the time.

Limitations of the Exemptive Order

As a practical matter, the SEC relief is effectively limited to company self-tenders for cash.  Because all of the conditions set out in the Exemptive Order must be met in order for the relief to be used, a wide range of equity tender offer transactions must continue to be conducted with 20-business day offering periods. These include:

• Cross-border tender offers (see “Excluded transactions” above);
• Going-private transactions under Exchange Act Rule 13e-3 (see “Excluded transactions” above);
• Hostile takeovers (see “Structure for third‑party offers (Regulation 14D offers)” above);
• Exchange offers and other transactions that utilize non-cash consideration (see “Form of consideration” above); and
• Modified Dutch auction self-tenders (see “Form of consideration” above).

In particular, because consideration must be all-cash in order for the relief to be used, having financing arrangements in place prior to the commencement of the tender offer to be able to fund the deal is critical if the transaction is to successfully close on an accelerated timeline.

In addition, where a transaction requires regulatory (such as antitrust) clearance, the deal timeline will continue to be impacted by the relevant regulatory review periods and timing constraints, regardless of the Exemptive Order.

Nevertheless, acquirors, targets and issuers thinking about tender offers will need to carefully consider and analyze the impact of the Exemptive Order in structuring and executing such transactions.