Tender Offer Method

Illustration – 1

Current Market Price : Rs. 55 per share

No. of shares announced to be

Bought back by the company : 1,00,000

Mode of buyback : Tender offer

Buyback price announced by the

Company : Rs. 75 per share (ie at a premium of Rs. 20 per
Share over the prevailing market price)

Total shares offered for Decision taken by the Total number of shares
buyback at the buyback company accepted by the company
price for buyback
1). 4,00,000 a). Extend the size of 4,00,000
buyback and repurchase all
the shares.

OR

b). Purchase the shares pro

rata, ie., 1,00,000
1,00,000 / 4,00,000 x 100
= 25%
of each shareholders
offering.
2). 50,000 a). Cancel the offer NIL
OR
b). Buyback all the shares
which are tendered, even if 50,000
it is less than the number
specified.

OR

c). Extend the time period

of the offer. 50,000 + number subscribed
for during the extended time
period.