A purchase offer made directly to shareholders of the target, typically at an offer price greater than the current market price?

• A. Common name statute
• B. Derivative suit
• C. Limited partnership
• D. Tender offer

Answer: (D)

A tender offer is a direct purchase proposal to a target’s shareholders to buy their shares, usually at a premium to the current market price. This premium is the incentive for shareholders to tender their stock, and the offer is made directly to them rather than through the company’s board. Tender offers can be part of a hostile takeover if the board resists, and they may be cash, stock, or a mix.

The other terms refer to different concepts: a derivative suit is a lawsuit brought by shareholders on behalf of the corporation against its officers or directors; a limited partnership is a business structure with both general and limited partners; a common name statute relates to corporate naming or branding issues. None of these describe a direct share-purchase proposal to shareholders at a premium.