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Corporate action events

TEND: Tender/Acquisition/Takeover/Purchase Offer

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TEND announces an offer by a third party, usually a bidder for the company, to buy holders’ securities for cash, securities or both. It is normally voluntary: holders decide whether to tender. A squeeze-out that forces the last holders to sell is sent as mandatory.

Code
TEND
Usually announced as
VOLU (MAND for a squeeze-out, CHOS in some markets)

What TEND means

In a takeover or tender offer, the bidder offers a price per share (:90a::OFFR) or a share exchange to all holders, often subject to conditions such as a minimum acceptance level. Holders who want to sell tender their shares through the custody chain; those who do nothing keep them.

The ECB SCoRE rulebook gives TEND as VOLU with CASH, SECU, CASE and NOAC, and as MAND (for equities) when participation is compulsory, for example in a squeeze-out. ASX describes the lifecycle: the event starts as VOLU and, once compulsory acquisition is announced, becomes MAND (one consideration) or CHOS (several).

The offer type is given with :22F::OFFE in sequence D, for example SQUE (squeeze-out bid), FINL (final offer), PART (partial offer) or DISS (dissenters’ rights).

When you see it

  • In an MT564 with an offer period (:69a::PWAL), a market deadline (:98a::MKDT) and a response deadline (:98a::RDDT), and often extra dates such as the unconditional date, results publication and proration date. Updates follow as the offer is extended or the terms improve.
  • TEND vs BIDS: BIDS is a buy-back by the issuer itself. TEND vs EXOF: an exchange offer swaps securities, often initiated by the issuer. TEND vs MRGR: a merger binds every holder once approved. TEND vs NOOF: NOOF is an unregulated offer such as a mini-tender. TEND vs DTCH: in a Dutch auction holders tender at prices within a range.

What to do next

  • Pass the offer to beneficial owners with the terms and the account servicer’s deadline, which is earlier than the market deadline. Instruct with an MT565 per account.
  • Tendered shares are usually blocked and cannot be sold while the offer runs. Check whether withdrawal is allowed (:17B::WTHD) before telling clients they can change their mind.
  • Expect proration if the offer is for part of the shares. On the MT566, reconcile the shares debited, the consideration received and any shares returned after proration. Track statuses in the MT567.

Where it appears in MT and ISO 20022

MT (ISO 15022)

  • MT564 sequence A (GENL), :22F::CAEV//TEND with :22F::CAMV//VOLU (or //MAND, //CHOS)
  • MT564 sequence D, :22F::OFFE//SQUE and other offer types; sequence E, :17B::WTHD (withdrawal allowed); sequence E2, :90a::OFFR (price offered)
  • MT565, MT566 and MT567 sequence A, :22F::CAEV//TEND

MX (ISO 20022)

  • seev.031 CorpActnGnlInf/EvtTp/Cd = TEND (checked in seev.031.001.15), with the flag in CorpActnGnlInf/MndtryVlntryEvtTp/Cd
  • The same CorpActnGnlInf/EvtTp/Cd = TEND appears in seev.033 (instruction) and seev.036 (movement confirmation)
  • The offer type is in CorpActnDtls/OfferTp/Cd of seev.031 (0..n)

Questions

What is the difference between TEND, BIDS and EXOF?
TEND is an offer from a third party, typically a bidder for the company. BIDS is the issuer buying back its own securities. EXOF is an exchange of securities for other securities or cash, often proposed by the issuer itself.
Why is a TEND sometimes MAND?
When the bidder has acquired enough shares to force the remaining holders to sell (a squeeze-out or compulsory acquisition), participation is no longer optional. The event is then sent as MAND, or CHOS if the remaining holders can still choose between considerations.
Can I withdraw a tender instruction?
Only if the offer allows it. The MT564 shows it with :17B::WTHD//Y on the option, sometimes with a revocability period. If withdrawal is allowed, send a cancellation of your MT565 before the deadline.