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On April 16, 2026, the U.S. Securities and Exchange Commission’s (the SEC) Division of Corporation Finance (CorpFin) issued an exemptive order (the Order) permitting certain tender offers for equity securities to remain open for a minimum of 10 business days, rather than the 20 business days ordinarily required under Rules 13e-4(f)(1) and 14e-1(a) of the Securities Exchange Act of 1934 (the Exchange Act). The Order is the latest step in the SEC’s broader effort to modernize the mergers & acquisitions process and has the potential to meaningfully accelerate deal timelines and reduce market risk for both offerors and target shareholders.
Scope of Relief
The Order permits the shortened 10-day offer period for three categories of tender offers, each subject to specific conditions:
- Third-Party Offers for Reporting Companies (Regulation 14D). The offer must be made pursuant to a negotiated merger agreement or similar business combination agreement, for all outstanding securities of the subject class, with cash-only consideration at a fixed price. The target must file and disseminate a Schedule 14D-9 by 5:30 p.m. ET on the first business day after commencement. The offer cannot be a going-private transaction (Rule 13e-3) or rely on cross-border exemptions set forth in Rule 14d-1(d) or Rule 13e-4(i).
- Issuer Self-Tenders for Reporting Companies (Rule 13e-4). The offer must be for less than all outstanding securities of the subject class, with cash-only consideration at a fixed price. The offer cannot be a going-private transaction (Rule 13e-3) or rely on cross-border exemptions set forth in Rule 14d-1(d) or Rule 13e-4(i).
- Issuer Self-Tenders for Non-Reporting Companies. The offer must be made by the issuer or its wholly owned subsidiary, with cash-only consideration at a fixed price.
Across all categories, if a competing tender offer is announced after commencement, the initial offer must be extended back to at least 20 business days. The Order also imposes specific press release and notice requirements for commencement of and any material changes to the offer.
Looking Ahead
The Order represents a significant advancement for the tender offer rules as the current SEC continues to modernize the federal securities regulatory framework to catch up with technology and the markets it oversees. We expect CorpFin to next turn its attention to the debt tender offer rules and liability management transactions. In a letter submitted on April 9, 2026, the New York City Bar Association’s Securities Regulation Committee recommended a number of practical and sensible reforms to modernize both the equity and debt tender offer rules. Recommended reforms focused on the existing five-business-day framework for certain debt tender offers, including proposals to permit abbreviated offers accompanied by consent solicitations, remove restrictions on financing with senior indebtedness proceeds, allow the framework to be used for capped or partial tenders, and broaden the definition of “Qualified Debt Securities” in exchange offers. Market participants should continue to monitor these developments closely over the next few months.
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