SEC Exemptive Order Permits 10-Business-Day Tender Offer Minimums

April 21, 2026

SEC Issues Exemptive Order Permitting Shortened Tender Offer Periods

Ryan Rourke Reed Foley Hoag LLP - Public Companies & the Law + Follow Contact LinkedIn Facebook X ;) Embed

On April 16, 2026, the Office of Mergers and Acquisitions within the SEC’s Division of Corporation Finance issued a significant exemptive order that permits certain tender offers for equity securities to remain open for as few as 10 business days, rather than the standard 20 business days required under Exchange Act Rules 13e-4(f)(1)(i) and 14e-1(a). The order applies to tender offers involving both reporting and non-reporting companies and reflects the Division’s effort to modernize the regulatory framework governing tender offers to better account for technological advancements, reduce unnecessary market exposure, and address longstanding market inefficiencies.

Background and Regulatory Context

Under the existing regulatory regime, tender offers must remain open for a minimum of 20 business days. This requirement, codified in Exchange Act Rules 13e-4(f)(1)(i) and 14e-1(a), has been a cornerstone of the tender offer process for decades, designed to ensure that security holders have adequate time to evaluate an offer and make an informed decision. Over the years, however, the Division has issued numerous exemptive orders and no-action letters permitting abbreviated offering periods for certain categories of tender offers — particularly those involving debt securities. The new order extends this approach more broadly to equity securities, granting relief that the Division considers “appropriate and consistent with investor protection goals.”

Relief Granted: Reporting Companies

For tender offers involving equity securities of reporting companies — that is, issuers with a class of securities registered under Section 12 of the Exchange Act or reporting under Section 15(d) — the order permits a minimum offering period of 10 business days, provided a series of conditions are satisfied. The term “offering period” refers to the initial offering period, as defined in Exchange Act Rule 14d-1(g)(4), and does not include any subsequent offering period.

For third-party tender offers subject to Regulation 14D, the offer must be made pursuant to a negotiated merger agreement or similar business combination agreement, must be for all outstanding securities of the subject class, and the subject company must file and disseminate a Schedule 14D-9 no later than 5:30 p.m. Eastern time on the first business day following commencement. For issuer tender offers subject to Rule 13e-4, the offer must be for less than all outstanding securities of the subject class.

Additional conditions apply across both categories. The consideration must consist solely of cash at a fixed price. The offer must not be subject to the going-private rules under Rule 13e-3 and must not rely on the cross-border exemptions set forth in Rule 14d-1(d) or Rule 13e-4(i). The subject securities must not be the subject of a previously announced or pending competing tender offer at the time of public announcement. Notably, if a competing offer for the subject securities is publicly announced after commencement, the initial offer must be extended so that it remains open for at least 20 business days from the original commencement date.

The order also imposes specific disclosure and communication requirements. The tender offer must be announced via a press release through a widely disseminated news or wire service, including basic terms of the offer and an active hyperlink to the tender offer materials, by 10:00 a.m. Eastern time on the commencement date. Any material change in the percentage of securities sought or in the consideration offered must be publicly announced no later than 9:00 a.m. Eastern time on the fifth business day before expiration, and any other material change must be announced by 9:00 a.m. Eastern time on the second business day before expiration.

Relief Granted: Non-Reporting Companies

The order also provides parallel relief for tender offers involving equity securities of non-reporting companies — issuers that do not have a class of securities registered under Section 12 and are not required to file reports under Section 15(d). Under this exemption, an issuer or its wholly-owned subsidiary may conduct a tender offer with a 10-business-day minimum offering period, provided the consideration consists only of cash at a fixed price and the same material change notification requirements described above are met. Because these issuers are not publicly reporting, the communication obligations run to holders of the subject securities directly, rather than through press releases.

Limitations and Ongoing Obligations

The Division makes clear that the exemptions are subject to the stated conditions, and that offerors remain fully 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. The Division expressly reserves the right to reconsider, modify, or withdraw the relief if it becomes aware of material issues arising from the order. The order also notes that the Division expresses no view on any other questions a tender offer may raise, including the adequacy of disclosure or the applicability of other federal or state laws.

Practical Implications and Key Takeaways

This exemptive order is a meaningful development for M&A practitioners, issuers, and financial advisors. For negotiated transactions structured as tender offers followed by back-end mergers, the ability to close a tender offer in as few as 10 business days — roughly half the previous minimum — could significantly accelerate deal timelines and reduce the window of exposure to market volatility and competing bids. Issuer tender offers for partial repurchases also benefit from the shortened timeline. That said, it will be important to pay close attention to the conditions attached to the relief, particularly the requirements around cash-only consideration, the exclusion of going-private transactions, and the automatic extension to 20 business days if a competing offer emerges. Strict compliance with the order’s heightened early-disclosure requirements for public announcements of offer terms and material changes will be critical.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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