What Is A Dutch Tender?

Monday, 30 Jul 2007 | 11:33 AM ET

Finance can be fun too! We’ve got terms like straddle and strangle, or Jeff Macke’s personal favorite - crack spread! On Friday Dylan Ratigan asks, “What is a Dutch tender?

What's a Dutch Tender?
Dylan asks folks in Times Square what they think a "Dutch Tender" is.

Dylan hit the streets of New York City to see if “real” people know what the term Dutch tender means. Most don’t.

Dylan explains it’s basically a backward takeover offer. “Instead of me bidding for you, you bid for me,” he says.

If you’re interested, here’s a more involved explanation:

A Dutch tender offer operates like an auction; a company offers to repurchase a specific number of shares within a given price range. Shareholders are invited to tender shares over a 35 calendar day period, and do so by specifying the lowest price within the range that they will accept.

The company collects investor offers, and purchases the tendered shares up to the specified share limit at the lowest price possible. If the company receives more offers at the accepted price than the specified share number, all shareholders who tendered at or below the accepted price will receive a pro-rata allocation.

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Trader disclosure: On July 27th 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders;Macke Owns (ATVI), (DIS); Najarian Owns ( C),(GS) SSusquehanna Financial Group Is A Market Maker In (GTRC), (ATVI), (AMZN), (ERTS), (INTC), (KYPH), (VMSI); Susquehanna Financial Group Owns More Than 1% Of (BZH); Gilbert Owns Options In (HOT) Stacey Briere Gilbert Is Chief Options Strategist For Susquehanna Financial Group, LLLP; Gilbert Is Head Of Market Intelligence Research For Susquehanna Financial Group, LLLP; Gilbert Does Not Cover Individual Securities But Does Recommend Trading Strategies


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