Hedged Tender

A hedged tender is a type of tender offer in which the bidder offers to purchase the target company's shares at a price that is higher than the current market price. The bidder may also offer to purchase the target company's debt securities at a price that is higher than the current market price.

The purpose of a hedged tender is to protect the bidder from the risk that the target company's stock price will decline before the tender offer is completed. If the target company's stock price declines, the bidder will be able to purchase the target company's shares at a lower price than the price it offered in the tender offer.

There are two main types of hedged tenders:

* A cash tender is a tender offer in which the bidder offers to purchase the target company's shares for cash.
* A stock tender is a tender offer in which the bidder offers to purchase the target company's shares for its own stock.

In a cash tender, the bidder will typically offer to purchase the target company's shares at a price that is higher than the current market price. This is because the bidder will want to make sure that it is able to acquire the target company's shares at a price that is below the value of the target company's assets.

In a stock tender, the bidder will typically offer to purchase the target company's shares for its own stock. This is because the bidder will want to avoid having to pay cash for the target company's shares.

The use of hedged tenders has become increasingly popular in recent years. This is because hedged tenders can help to protect bidders from the risk of target company stock price declines.