South Sporting Goods made a tender offer for 80 percent of North Sporting Goods. North Sporting Goods has 50,000 shares outstanding. You are a shareholder of North Sporting Goods. If shareholders of North Sporting Goods tender 35,000 shares, and you tender 1,000 shares, how many of your shares will be accepted by Tyler's Chicken?

Question

Quizplus · Accepted Answer

Since South Sporting Goods made a tender offer for 80% of North Sporting Goods' 50,000 shares (which equals 40,000 shares), and only 35,000 shares were tendered, all 35,000 shares will be accepted because the tendered amount is less than the 40,000 shares South Sporting Goods wants to acquire. Therefore, if you tender 1,000 shares, all of your shares will be accepted.

South Sporting Goods Made a Tender Offer for 80 Percent