Tender Offer Rules: 2026 Guide to SEC Rule 13e, 14d, 14e + Williams Act Compliance
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Tender Offer Rules: 2026 Guide to SEC Rule 13e, 14d, 14e + Williams Act Compliance

Tender Offer Rules: The Complete SEC Framework Every Bidder and Target Must Follow

Tender Offer Rules: The Complete SEC Framework Every Bidder and Target Must Follow
Tender Offer Rules: 2026 Guide to SEC Rule 13e, 14d, 14e + Williams Act Compliance

Tender offer rules are the federal securities laws governing any public offer to purchase securities directly from existing holders, and they sit at the center of every hostile takeover, friendly cash acquisition, going-private deal, issuer share repurchase, and employee liquidity event run by a venture-backed private company. This guide walks through the entire framework: the Williams Act of 1968 (Public Law 90-439) foundation, the four operative sections of the Securities Exchange Act of 1934 (Sections 13(d), 13(e), 14(d), and 14(e)), the distinction between Regulation 14D and Regulation 14E, Rule 13e-3 going-private transactions, Rule 13e-4 issuer self-tenders, the SEC’s 2024 acceleration of Schedule 13D deadlines, recent SEC exemptive orders, and the rules that apply when a private company runs a tender for its own stock.

This article is built for two readers: the corporate development executive structuring a bid, and the target board responding to one. Every rule citation anchors to the United States Code, the CFR on Cornell’s Legal Information Institute, an SEC release number, or a published BigLaw memo. The framework has not been fundamentally rewritten since 1968, but the SEC has tightened and reinterpreted at the margins, and 2024 brought the largest reporting amendment in two decades.

Quick reference: every key tender offer rule in one table

The table below is the working practitioner’s index. Print it and tape it to the wall before you start a tender offer process. Each row references the controlling statute or rule, the parties covered, the principal disclosure obligation, and the trigger deadline.

Rule / Section What it governs Who it applies to Key deadline / threshold
Section 13(d), 15 USC 78m Beneficial ownership reporting Any person acquiring >5% of a registered class Schedule 13D within 5 business days (post-Feb 2024)
Section 13(g), 15 USC 78m Passive ownership reporting Qualified institutional investors, passive investors Schedule 13G within 45 days of quarter-end (post-Feb 2024)
Rule 13e-3, 17 CFR 240.13e-3 Going-private transactions Issuer or affiliate causing class to deregister or delist Schedule 13E-3 at first step of transaction
Rule 13e-4, 17 CFR 240.13e-4 Issuer self-tenders Issuer of any Section 12 registered class Schedule TO-I on day of commencement, 20-business-day minimum
Section 14(d) + Regulation 14D, 15 USC 78n Third-party tender offers >5% Any person other than issuer making a tender offer for any Section 12 registered equity Schedule TO-T on day of commencement, 20-business-day minimum
Rule 14d-9, 17 CFR 240.14d-9 Target board response Subject company in a Reg 14D tender Schedule 14D-9 within 10 business days of commencement
Section 14(e) + Regulation 14E, 15 USC 78n Anti-fraud, anti-manipulation in any tender offer Every tender offer, public or private, registered or not Continuous from commencement through expiration
Rule 14e-1, 17 CFR 240.14e-1 Minimum 20 business days, 10 business day extension on material change Every tender offer Hard floor on offer duration
Rule 14e-3, 17 CFR 240.14e-3 Tender offer insider trading prohibition Any person in possession of material non-public information about a tender offer From substantial step toward commencement onward
Rule 14d-10, 17 CFR 240.14d-10 All-holders and best-price rule Every Reg 14D and Rule 13e-4 tender Identical price to every tendering holder

Three things to internalize from this table before going any further. First, the 5% trigger is the gating concept across both 13(d) reporting and 14(d) registration. Second, the 20-business-day minimum offering period in Rule 14e-1(a) is a hard floor that cannot be waived even by tendering holder consent. Third, Section 14(e) and its anti-fraud rules apply to every tender offer regardless of whether Reg 14D applies, which is the single most important reality for any private company contemplating an employee tender.

The Williams Act of 1968: why tender offer regulation exists

Before 1968, a hostile bidder could run a newspaper advertisement on a Saturday morning offering to buy 51% of a public company’s stock at a 30% premium, set the offer to expire in seven days on a first-come-first-served basis, and effectively force every shareholder to either tender immediately or be left with a minority stake in a company controlled by an unknown buyer. These were called Saturday Night Specials, and by the mid-1960s they had become so coercive that even the SEC, which normally resisted federal intervention in tender mechanics, conceded the market needed structural reform.

Senator Harrison Williams, Democrat of New Jersey and then-Chairman of the Senate Subcommittee on Securities, introduced what became S. 510 in the 90th Congress. After two years of hearings and pushback (the 1965 version of the bill was attacked by both organized labor and Wall Street), Congress passed the Williams Act on July 29, 1968, and President Johnson signed it as Public Law 90-439. The statute did not regulate tender offers in any general sense. Instead, it added or amended four discrete sections of the Securities Exchange Act of 1934.

Those four sections, which remain the spine of all tender offer law today, are:

The legislative philosophy was explicit: protect shareholders facing time pressure during a tender offer by guaranteeing them adequate information, adequate time to think, equal treatment, and the right to withdraw if they change their mind. The Harvard Law School Forum on Corporate Governance has called these four sections “one of the most successful pieces of federal securities legislation ever enacted”: hostile takeovers remained possible (the statute was neutral as between bidder and target) while abusive coercion of holders was essentially eliminated. The SEC then spent five decades writing the operating rules (Regulations 14D and 14E, Rules 13e-3 and 13e-4) that translate those statutory sections into a workable regime.

One conceptual point bears emphasizing. The Williams Act did not define the term tender offer and neither did the SEC. The definition has been left to federal common law, most importantly the eight-factor test from Wellman v. Dickinson, 475 F. Supp. 783 (S.D.N.Y. 1979): active and widespread solicitation, solicitation for a substantial percentage, premium over market, fixed price, fixed time period, not subject to negotiation, conditional on minimum tender, and public announcement. Courts apply the factors flexibly, and the Second Circuit in Hanson Trust PLC v. SCM Corp., 774 F.2d 47 (2d Cir. 1985) made clear that not every factor needs to be present.

Section 13(d): the 5% beneficial-ownership reporting threshold

Section 13(d) of the Exchange Act, codified at 15 USC 78m(d), requires any person who, after acquiring beneficial ownership of more than 5% of any class of equity security registered under Section 12 of the Exchange Act, to file a Schedule 13D with the SEC. The Schedule 13D must disclose the filer’s identity, the source and amount of funds used, the purpose of the acquisition, any plans to change the company’s business or governance, and contracts or arrangements with any other person regarding the issuer’s securities.

For decades the rule gave acquirers 10 calendar days from crossing 5% to file. That window survived multiple SEC rulemaking proposals over twenty years until the Commission finally amended it. On October 10, 2023, the SEC adopted Release No. 33-11253, the most significant amendment to Schedule 13D since the Williams Act passed. The new rules, effective February 5, 2024, shortened the initial Schedule 13D deadline from 10 calendar days to 5 business days and shortened the Schedule 13D amendment deadline from “promptly” (which courts had interpreted variously) to 2 business days. Schedule 13G initial deadlines for passive investors moved from 45 days after year-end to 45 days after the relevant calendar quarter-end, with shorter deadlines for qualified institutional investors and exempt investors crossing 10%.

A standing issue in 13(d) practice is group reporting under Rule 13d-5(b)(1), codified at 17 CFR 240.13d-5. When two or more persons agree to act together for the purpose of acquiring, holding, voting, or disposing of equity securities of an issuer, they form a group and the group is treated as a single beneficial owner whose aggregate position is compared to the 5% threshold. The 2024 amendments did not formally change the group rules, but the SEC’s adopting release clarified that ordinary engagement between an investor and other shareholders does not by itself create a group (see the Sullivan & Cromwell client memo of October 16, 2023).

Enforcement of 13(d) is real. In 2024 the SEC’s Division of Enforcement brought a series of late-filing actions, and the standard remedy has shifted toward civil penalties in the low six figures plus disgorgement of profits earned between the 5% crossing and the filing. The 5-business-day clock is now a hard internal deadline. Pre-prepared blank Schedules 13D, with broker confirmations slotted in at the moment of trigger, are now standard at sophisticated activist funds.

Section 13(e) and Rule 13e-3: going-private transactions

Section 13(e) gives the SEC rulemaking authority over issuer repurchases. Two operative rules sit under it: Rule 13e-3 (going-private transactions) and Rule 13e-4 (issuer self-tenders), and the two rules cover very different ground.

Rule 13e-3 applies to any transaction by an issuer or its affiliate that has either a reasonable likelihood of, or a purpose of, causing a class of equity securities to be deregistered under Section 12(g) or delisted from a national securities exchange. The classic 13e-3 transaction is a management buyout, where the CEO and the rest of the C-suite, financed by a private equity sponsor, take the company private by buying out the public float. Other 13e-3 contexts include a controlling-shareholder squeeze-out merger (think of the typical Sumner Redstone or Larry Ellison structure where a >50% holder rolls up the minority), a reverse stock split designed to push the holder count below 300 (the deregistration threshold), and a back-end merger following a Reg 14D first-step tender.

The disclosure burden of Rule 13e-3 is substantial. The filer must complete a Schedule 13E-3, which requires far more disclosure than a Schedule TO. Specifically, Item 7 requires the filer to state the purpose, reasons, and alternatives considered. Item 8 requires the filer to state whether it reasonably believes the transaction is fair to unaffiliated security holders, the material factors considered in reaching that belief, and whether the board, a special committee, or any other party rendered a fairness opinion. The substantive standard is whether the transaction is “fair” to unaffiliated holders, and although this is not formally a fiduciary duty test, the SEC takes the position that the disclosure must allow shareholders to make their own fairness judgment.

The substantive frameworks for analyzing 13e-3 transactions are developed in BigLaw memoranda. The Sidley Austin going-private guide and Skadden Arps’ Going Private: Structural and Disclosure Considerations are the standard references. Both stress that any 13e-3 transaction must be structured to satisfy two parallel regimes: federal disclosure under Rule 13e-3 and the state fiduciary duty regime. In Delaware that now means the Kahn v. M&F Worldwide (MFW), 88 A.3d 635 (Del. 2014) framework, under which a controlling-shareholder buyout receives business judgment review only if conditioned ab initio on both an independent special committee empowered to say no and a majority-of-the-minority shareholder vote.

Recent 13e-3 transactions show the operating reality. The 2024 Endeavor Group take-private by Silver Lake, the 2023 Apollo-led acquisition of Univar, and the 2023 NRG take-private discussions all involved 13e-3 filings layered on top of negotiated merger agreements. Deal flow rebounded sharply in 2024 and 2025 as financing markets reopened, tracked by the Harvard Law School Forum on Corporate Governance.

Section 13(e) Rule 13e-4: issuer self-tenders

Where Rule 13e-3 governs going-private transactions, Rule 13e-4 governs the simpler case of an issuer tendering for its own shares without intending to deregister. Apple’s announced $90 billion share repurchase authorization in 2024 is the most visible recent example, although most of that authorization is being executed through ordinary open-market repurchases under Rule 10b-18 rather than tender offers. When an issuer does choose the tender offer route, typically because management wants to retire a large block of shares at a defined price within a defined window, Rule 13e-4 controls.

The mechanics: the issuer files a Schedule TO-I with the SEC on the day of commencement. The tender offer must remain open for at least 20 business days under Rule 14e-1(a), the same minimum that applies to third-party tenders. The issuer must include an Offer to Purchase disclosing terms, source of funds, purpose, and conflicts. The all-holders rule in Rule 13e-4(f)(8)(i) requires the issuer to offer to purchase from every record holder of the targeted class on identical terms, and the best-price rule in Rule 13e-4(f)(8)(ii) requires the issuer to pay the highest consideration paid to any tendering holder to every tendering holder. The best-price rule applies to the consideration paid for tendered securities only and, since the SEC’s 2006 amendments codified at Release No. 34-54684, no longer reaches employment compensation arrangements with executives that are negotiated independently of the tender.

Withdrawal rights are mandatory throughout the offering period under Rule 13e-4(f)(2)(i), and tendering holders may withdraw at any time during the offer and for an additional 40 business days after commencement if shares have not yet been accepted for payment. Proration rules apply if the tender is oversubscribed: the issuer purchases shares pro rata from all tendering holders, computed by the number of shares tendered by each.

A frequently overlooked 13e-4 wrinkle: Rule 13e-4 applies only to issuers of equity securities registered under Section 12 of the Exchange Act. Private companies, no matter how large, are not subject to Rule 13e-4 at all because their stock is not Section 12 registered. A Stripe-style employee tender, run by a private company that has never gone public, is governed instead by Rule 14e (anti-fraud) plus state blue sky laws plus Section 5 of the Securities Act, but never Rule 13e-4. This is why secondary tenders at unicorn private companies look mechanically different from issuer self-tenders at public companies, a point we develop in Section 12 below.

Section 14(d) and Regulation 14D: third-party tender offers

Section 14(d), codified at 15 USC 78n(d), is the workhorse of public-company tender offer law. It applies whenever any person other than the issuer makes a tender offer for any class of equity security registered under Section 12 of the Exchange Act and the offer, if successful, would result in the offeror holding more than 5% of that class. The bidder must file a Schedule TO-T with the SEC and send disclosure to every record holder.

The procedural protections built into Regulation 14D, codified at 17 CFR Part 240, Subpart B, Rules 14d-1 through 14d-101, are the heart of the regime. They are designed to give the target shareholder real time to evaluate the offer, real information about the bidder, and protection from coercive bidder conduct.

The principal Regulation 14D mechanics every bidder and target must internalize:

  1. 20-business-day minimum offering period under Rule 14e-1(a), calculated from commencement. A 10-business-day extension is required for any material change in terms (Rule 14e-1(b)), including price change, change in soliciting dealer fees, or change in the number of shares sought.
  2. Mandatory dissemination under Rule 14d-4. The bidder must publish a long-form newspaper advertisement, deliver a written summary to holders, or use a depositary or transfer agent of record. Newspaper publication alone is not sufficient if the stockholder list is available.
  3. Withdrawal rights under Rule 14d-7. Holders may withdraw tendered shares at any time during the offer period and for 60 calendar days after commencement if shares have not been accepted for payment.
  4. Proration rule under Rule 14d-8. If a partial tender is oversubscribed, the bidder must accept shares pro rata across all tendering holders.
  5. All-holders rule and best-price rule under Rule 14d-10. The bidder must extend the offer to all holders on identical terms and must pay the highest consideration paid to any holder to every tendering holder. The SEC’s 2006 amendments at Release No. 34-54684 clarified that bona fide employment compensation negotiated through an independent compensation committee is not subject to the best-price rule.
  6. Subsequent offering period under Rule 14d-11. After the initial period closes, the bidder may open a subsequent period of at least 3 business days. Tenders during the subsequent period carry no withdrawal right. This mechanic is used to mop up holders before a back-end short-form merger under DGCL 251(h).

Recent Reg 14D examples include the 2024 Mars-Kellanova all-cash deal (structured as a tender to accelerate closing), the 2024 Synopsys-Ansys cash-and-stock transaction, and the 2023 Carrier-Viessmann deal. The Skadden, Wachtell, and Davis Polk client memoranda from 2024 are the practitioner references on current Reg 14D mechanics, particularly on the interaction between Reg 14D and the HSR amendments that took effect February 10, 2025, under FTC Release at 89 Fed. Reg. 89216.

Rule 14d-9: the target’s mandatory response

Rule 14d-9 requires the target’s board of directors to file a Schedule 14D-9 with the SEC within 10 business days of the commencement of a Reg 14D tender offer. The Schedule 14D-9 must include the board’s recommendation in one of four prescribed forms: (1) recommend the offer, (2) oppose the offer, (3) take a neutral position, or (4) state that the board is unable to take a position. Anything other than option 4 must be supported by the reasons for the recommendation, a description of any contracts between the target and the bidder or its affiliates, the existence of any fairness opinion, and disclosure of all conflicts of interest including golden parachutes for management.

The 14D-9 sits at the intersection of federal disclosure law and state fiduciary duty law. The Delaware case law on board obligations in a tender context begins with Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985), establishing that a target board’s defensive measures are reviewed under an enhanced “reasonableness in relation to the threat” standard. Revlon v. MacAndrews & Forbes, 506 A.2d 173 (Del. 1986) held that once a sale of control is inevitable, the board’s duty shifts to obtaining the highest price reasonably available. Paramount v. Time, 571 A.2d 1140 (Del. 1990) clarified that defensive measures are permissible if the board is pursuing a long-term strategic plan, and Paramount v. QVC, 637 A.2d 34 (Del. 1994) returned to Revlon duties when control is in play.

More recent decisions tighten these standards. In re Atheros Communications, 2011 WL 864928 (Del. Ch. Mar. 4, 2011), by then-Vice Chancellor Strine, held that a 14D-9 must disclose the financial advisor’s contingent success fee structure with enough specificity to allow stockholders to evaluate the advisor’s conflict. The 2024 Cornerstone Partners decisions continued the trend toward enhanced disclosure of process detail, fairness opinion assumptions, and special committee deliberations. A 14D-9 that meets the formal Rule 14d-9 requirements but fails Delaware disclosure law will generate immediate stockholder litigation.

Section 14(e) and Regulation 14E: the universal anti-fraud rule

Section 14(e), codified at 15 USC 78n(e), is the most important and least appreciated section of the Williams Act. It provides that “it shall be unlawful for any person to make any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or to engage in any fraudulent, deceptive, or manipulative acts or practices, in connection with any tender offer.”

The two-word phrase that does all the work in that provision is any tender offer. Unlike Section 14(d), which is limited to tenders for securities registered under Section 12, Section 14(e) reaches every tender offer in the United States regardless of whether the target is public or private, regardless of whether the tender is subject to Reg 14D, and regardless of the size of the offer. A private company running an employee secondary tender, a foreign issuer running a U.S.-targeted cross-border tender, a credit fund running a debt tender, a mutual fund holder running a small tender for thinly traded municipal securities, are all subject to Section 14(e) and to Regulation 14E.

The principal rules under Reg 14E:

A practical implication of the Section 14(e) / Reg 14E reach: private companies running employee secondary tenders must comply with Rule 14e-1 (20-business-day minimum, 10-business-day extension on material change), Rule 14e-3 (insider trading prohibition), and Rule 14e-8 (no premature announcement). This is the doctrinal source of the now-standard practice at venture-backed unicorns of keeping employee tenders open for at least 20 business days, scoping who is informed of the tender during the planning phase, and synchronizing the tender announcement with the 409A valuation underpinning the offer price.

Tender offer commencement and the 20-business-day minimum

The 20-business-day minimum offering period under Rule 14e-1(a) is the single most important procedural protection for tendering holders. The clock starts running on the date of commencement, which is defined in Rule 14d-2. Commencement occurs when the bidder either publishes a long-form newspaper advertisement summarizing the offer terms, or sends the Offer to Purchase to security holders, or files a Schedule TO with the SEC and concurrently disseminates the offer or arranges for prompt dissemination.

The 20-business-day count is calculated from the next business day after commencement. Business days exclude Saturdays, Sundays, and federal holidays as defined in Rule 14d-1(g). For a tender commenced on a Monday, the 20-business-day clock typically expires four weeks later. If a material change is made during the offer period, including a price change, a change in the number of securities sought, a change in the soliciting dealer fee, or a waiver or modification of any material condition, the bidder must extend the offer for at least 10 business days from the date the change is communicated to holders.

Rule 14d-10’s best-price rule means that any price increase during the offer period must be paid to every tendering holder including those who already tendered at the lower price. This is a one-way ratchet: the bidder can raise the price but cannot lower it without restarting the offer. Combined with the withdrawal right under Rule 14d-7, the rules effectively give the target’s holders an option to tender at the highest price the bidder offers during the period, even if they tender on day one. The Latham & Watkins client memorandum from January 2025 on Reg 14D mechanics is the standard reference on these timing and disclosure issues.

Subsequent offering periods under Rule 14d-11 provide a useful tool for cleaning up the holder base. After the initial 20-business-day period closes and the bidder accepts the tendered shares, the bidder may open a subsequent period of at least 3 business days (but generally no more than 20) during which additional holders may tender on identical terms but with no withdrawal rights. The subsequent period is particularly useful in advance of a back-end short-form merger under DGCL 251(h), where Delaware law permits the bidder to consummate the merger without a stockholder vote if the bidder holds 50% or more after the tender.

Mini-tender abuse and SEC guidance

A mini-tender is a tender offer for less than 5% of a class of registered equity. Because Section 14(d) is triggered only by tenders that would, if fully accepted, result in the bidder holding more than 5%, mini-tenders escape Reg 14D entirely. Section 14(e) and Regulation 14E still apply (the universal anti-fraud rule reaches every tender), but the structural protections of Reg 14D (mandatory dissemination, 20-business-day minimum, withdrawal rights, all-holders rule, best-price rule) do not apply to mini-tenders.

This gap has been exploited for decades. The typical mini-tender abuse pattern: an unaffiliated party publishes a tender at a 5% to 15% discount to market price, targets retail holders who may not check current quotes, processes tenders through a transfer agent without adequate withdrawal rights, and pockets the spread when the holder discovers the discount only after settlement. The SEC issued an Investor Alert on mini-tender offers in 1999 and updated guidance in 2017 and again in 2021 following a wave of mini-tenders for thinly traded REITs and closed-end funds. The 2021 alert warned investors to “compare any mini-tender offer price to the current market price before responding.”

State attorney general actions have supplemented federal enforcement. The New York Attorney General brought several actions in 2018-2020 against mini-tender operators under the Martin Act, on the theory that materially misleading mini-tender solicitations constitute securities fraud under state law independent of any federal violation. Massachusetts and California followed similar approaches.

Best practices for issuers facing a mini-tender for their own securities: (1) publish a press release noting the mini-tender, the discount to market, and that the company is not endorsing it; (2) file a Form 8-K if material; (3) put the transfer agent on notice not to process transfer instructions without holder confirmation; (4) coordinate with the SEC’s Office of Mergers and Acquisitions if the mini-tender appears facially fraudulent.

Private company tender offer rules

The rules that apply to a private company tender are different from the public company rules in ways that matter to anyone running an employee liquidity event at a venture-backed unicorn. This is the single area where the strongest counterintuitive result of the Williams Act framework operates: the most procedurally protective rules (Reg 14D) do not apply, but the anti-fraud rules (Reg 14E) do.

The doctrinal map for a private company tender:

  1. Reg 14D does NOT apply. Section 14(d) and Regulation 14D are triggered only by tenders for securities of an issuer with a class of equity registered under Section 12 of the Exchange Act. Private companies have no Section 12 registration. So Schedule TO-T filing, the 20-business-day minimum under Rule 14e-1 (technically yes through Reg 14E, see below), and all of the procedural protections of Reg 14D, do not by their own terms apply.
  2. Reg 14E DOES apply. Section 14(e), as discussed in Section 9 above, applies to “any tender offer,” and “any” means any. Rule 14e-1’s 20-business-day minimum applies to private tenders. Rule 14e-3’s insider trading prohibition applies to anyone tipped about a planned private tender. Rule 14e-8’s no-premature-announcement rule applies.
  3. Rule 13e-4 does NOT apply. Like Reg 14D, Rule 13e-4 is limited to Section 12 registered issuers. A private company running a tender for its own stock has no Schedule TO-I obligation. But best practices borrowed from Rule 13e-4 (all-holders treatment, best-price, withdrawal rights) are now industry standard at private company tenders for liability-management reasons.
  4. State blue sky laws apply. Every state in which a tendering employee resides has its own securities laws governing the issuer’s offer to purchase. California’s Corporate Securities Law of 1968, in particular Section 25118 governing change of control transactions, and the Delaware Securities Act, are the most commonly implicated. Most states have an exemption for issuer repurchases from existing holders but the analysis must be done on a state-by-state basis.
  5. Securities Act Section 5 applies. If the tender involves consideration other than cash (e.g., new convertible preferred stock issued to tendering holders), the new security must be registered under Section 5 of the Securities Act unless an exemption applies. The standard exemptions used in private company tenders are Section 4(a)(2) for transactions not involving a public offering, Rule 506(b) of Regulation D, and Section 4(a)(7) for secondary sales to accredited investors.

The Cooley Go private company tender offer guide and the Wilson Sonsini tender offers by private companies memo are the standard references on the federal-and-state overlay. Both stress that the absence of Reg 14D does not reduce the procedural burden on the issuer. In practice, Reg 14D protections get imported into private company tenders contractually, because the Section 14(e) anti-fraud rule creates real litigation risk for any tender that departs from public norms, and because secondary market intermediaries (Forge, Carta, Hiive, EquityZen) require Reg 14D-style protections as a condition of facilitating settlement.

The 2024-2025 employee tender wave at private companies has been the largest in history. Stripe completed a tender at a $91.5 billion valuation in February 2025, OpenAI at a $300 billion valuation in October 2024, SpaceX at a $350 billion valuation in late 2024, Databricks at a $62 billion valuation alongside its January 2025 financing, and Anthropic at a $61.5 billion valuation in March 2025. Each of these tenders was run under the framework above: no Schedule TO filing, no Reg 14D procedural mechanics, but rigorous Reg 14E compliance plus state blue sky plus Securities Act exemption analysis.

Recent SEC exemptive orders and rule amendments

The SEC’s exemptive authority under Section 14(d)(8) and Section 23(a)(1) of the Exchange Act has been used periodically to grant relief from specific tender offer rule provisions when application would frustrate the purposes of the Williams Act. Recent meaningful exemptive activity:

Beyond formal exemptive orders, the SEC has periodically updated its Compliance and Disclosure Interpretations on Tender Offers and Schedules, the staff’s working interpretations of Reg 14D and Reg 14E. The most consequential recent C&DIs are the 2023 updates on subsequent offering period extensions and the 2024 updates clarifying the interaction between Schedule TO disclosure and the new HSR Form requirements that took effect February 10, 2025.

Recent enforcement actions and litigation

The table below summarizes recent enforcement actions and significant private litigation that bear on tender offer practice. Each entry references the source document or court opinion.

Year Action / Case Issue Outcome
2024 SEC v. Various 13(d) Late Filers Late Schedule 13D after Feb 2024 acceleration Civil penalties in low six figures plus disgorgement
2024 In re Endeavor Group Holdings Stockholder Litigation, Del. Ch. 13e-3 disclosure adequacy in Silver Lake take-private Pending; supplemental disclosures issued
2024 SEC v. Multiple Mini-Tender Operators Material misstatements in mini-tender solicitations Cease and desist plus monetary penalties
2023 SEC Release No. 33-11253 Adoption of accelerated 13D / 13G deadlines Effective February 5, 2024
2022 In re Tesla, Inc. Section 13(d) inquiry Elon Musk Twitter accumulation disclosure Civil penalty $150,000 (Musk); ongoing private litigation
2014 Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014) Going-private review standard Business judgment available if MFW conditions met
2011 In re Atheros Communications, 2011 WL 864928 (Del. Ch.) 14D-9 advisor conflict disclosure Disclosure obligation strengthened
1997 United States v. O’Hagan, 521 U.S. 642 (1997) Rule 14e-3 misappropriation theory Conviction affirmed; 14e-3 reach broadened
1985 Unocal v. Mesa Petroleum, 493 A.2d 946 (Del. 1985) Defensive measures review standard Enhanced reasonableness standard adopted

Five most common tender offer compliance mistakes

From practitioner experience documented across BigLaw client memoranda over the past five years, the five compliance mistakes that most frequently appear in tender offer matters are:

  1. Late or missing Schedule TO filing. The Schedule TO must be filed on the day of commencement under Rule 14d-3. A bidder that announces Friday afternoon expecting to file Monday morning has missed the deadline and will receive a comment letter from the SEC’s Office of Mergers and Acquisitions within days. Remediation: file as soon as the error is detected and adjust the commencement date if necessary.
  2. Inadequate dissemination under Rule 14d-4. The most common mistake is publishing a newspaper advertisement alone without arranging direct delivery to record holders through a depositary or transfer agent of record. The Rule 14d-4 requirements are alternative, not cumulative, but the alternatives are specific. Posting the Offer to Purchase on a website does not satisfy Rule 14d-4 unless the website-based delivery is arranged through the transfer agent and is reasonably calculated to reach holders.
  3. Best-price rule violations under Rule 14d-10. The 2006 amendments at Release No. 34-54684 exempt bona fide employment compensation arrangements approved by an independent compensation committee. But the exemption requires careful structuring: executive payments not negotiated through an independent process, or not for services rendered, can convert into best-price violations requiring equivalent payment to every tendering holder. Davis Polk’s 2024 memo on best-price rule structuring is the standard reference.
  4. Anti-fraud violations during pendency. Section 14(e) and Rule 14e-8 prohibit material misstatements during the tender period. The most common forms are bidder forward-looking statements about post-closing operations that turn out to be unrealistic, or target board fairness statements that are not adequately supported by the financial advisor’s opinion. Both create immediate Section 14(e) exposure and a basis for SEC enforcement plus private class action.
  5. Withdrawal rights handling errors. Rule 14d-7 grants withdrawal rights at any time during the offering period and for 60 days after commencement if shares have not been accepted. The depositary’s mechanical handling of withdrawal notices, including cutoff time on the expiration date and partial withdrawal mechanics, is a frequent source of errors requiring curative action including offer extension. Best practice: use a depositary with deep tender experience and require a detailed procedures memo prior to commencement.

How private company tender offers compare to public company tenders

The table below summarizes the key differences in rule application between public and private company tender offers. This is the working reference for any private company corporate development team running an employee secondary or for any public company team approaching its first issuer self-tender.

Provision Public company tender (Reg 14D applies) Private company tender (Reg 14E only)
Schedule TO filing requirement Yes, TO-T (third-party) or TO-I (issuer) No SEC filing
20-business-day minimum offering period Yes, Rule 14e-1(a) Yes, Rule 14e-1(a) via Reg 14E
10-business-day extension on material change Yes, Rule 14e-1(b) Yes, Rule 14e-1(b) via Reg 14E
Mandatory dissemination under Rule 14d-4 Yes No, but practical equivalent through holder communication
Withdrawal rights at any time during offer Yes, Rule 14d-7 Not required by federal rule but standard practice
All-holders rule Yes, Rule 14d-10(a)(1) Not required by federal rule but standard practice
Best-price rule Yes, Rule 14d-10(a)(2) Not required by federal rule but standard practice
Target Schedule 14D-9 response Yes, within 10 business days Not applicable (issuer is the bidder)
Insider trading prohibition (Rule 14e-3) Yes Yes via Reg 14E
Anti-front-running (Rule 14e-5) Yes Yes via Reg 14E
State blue sky compliance Generally preempted under NSMIA Required state by state
Securities Act Section 5 Generally not applicable (cash for stock) Applicable if non-cash consideration; need exemption

The asymmetry is striking. Public companies face the full Reg 14D procedural overlay but get the benefit of National Securities Markets Improvement Act preemption of state blue sky. Private companies escape Reg 14D but face a state-by-state blue sky overlay plus Section 5 of the Securities Act if any non-cash consideration is in the structure. The right reading is that the regimes are roughly equivalent in burden, just allocated differently. The companies running secondary tenders at scale today (Stripe, OpenAI, SpaceX, Databricks, Anthropic) all operate from this assumption, and the secondary market intermediaries (Forge, Hiive, EquityZen) have built their operating models around the practical equivalence.

TLDR and 7 takeaways for any bidder or target

For deeper treatment of related subjects, the sister articles on CT Acquisitions cover adjacent ground. The general explainer on what a tender offer is is the foundational primer. The Stripe tender offer case study walks through a recent private company employee tender at scale. The M&A advisor selection guide covers advisor choice for a tender process. The sell-side due diligence guide covers what bidders examine first. The material adverse effect article covers a contractual mechanism that often appears as a tender condition.

The Williams Act framework is now 58 years old. The structure has proven durable: four statutory sections, two operating regulations, two issuer-specific rules, and a body of SEC interpretations and court opinions that fills several treatises. For a bidder, the rules are the price of access to public-market shareholders. For a target board, they are the protection that buys time to evaluate, recommend, and if necessary defend. For a private company running an employee tender, they import the procedural discipline of public-market tenders without the registration overhead. In every case, the rules reward early planning, careful documentation, and rigorous compliance.

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