Schedule 13E-4

What Is Schedule 13E-4?

The term Schedule 13E-4 alludes to a form that public companies were required to file with the Securities and Exchange Commission (SEC) when they made tender offers for their own securities. The form, known as an issuer tender offer statement, was required under the Securities Exchange Act of 1934. It forced added requirements that an issuer was required to follow when it made a self-tender offer. The form was replaced by Schedule TO-I in 2000.

Figuring out Schedule 13E-4

A tender offer happens during public takeover offers of public companies. The potential acquirer makes the tender offer publicly recorded as a hard copy, expressing its aim to purchase some or all the stock of the target company's shareholders. The bidder typically makes an offer at a premium from what the stock would go for on the open market. Tender offers might signal a hostile or friendly takeover.

Now and again, companies might need to buy back their own stock from their shareholders. These offers are known as self-tender offers. Just like an ordinary tender offer, the offer price is typically well over the market price per share. Self-tender offers are commonly made when a company is attempting to fight off a hostile takeover endeavor. By turning into its own majority shareholder, a target company can make a hostile takeover either inconceivable or restrictively costly for the company behind it.

Public companies making tender or self-tender offers are required to report their goals by filing forms with the SEC. Schedule 13E-4 was the form required for a self-tender offer according to Rule 13E-4 of the Securities Exchange Act of 1934. The purpose of the rule is to forestall any double dealing or potentially fraud. Until January 2000, companies expected to present the form when the offer was made. Information on the form included, yet wasn't limited to:

• The name of the subject company
• The transaction esteem
• The amount of the filing expense
• The name and foundation of the filer
• The terms of the transaction
• Information on the transaction including the source of the assets

Illustration of Self-Tender Offer

Herbalife filed Schedule TO-I in April 2018, in which the company announced it would buy back up to $600 million worth of its common shares. The company offered $98 to $108 a share. Its shares, however, were valued at $103.02 at closing on the day preceding the announcement. The announcement made the company's share price increase.

Here is one more illustration of a self-tender offer. In May 2018, AbbVie announced that it would repurchase up to $7.5 billion of its common stock at prices going from $99 to $114 a share. Stockholders were permitted to tender their stock at a price fitting their personal preference inside that reach, however when the tender offer expired, AbbVie would pick the best price inside the scope of those offered by stockholders at which to repurchase up to $7.5 billion of its common stock.

Schedules 13E-4 and TO-I can be seen on the SEC's Electronic Data Gathering, Analysis, and Retrieval system.

Special Considerations

Schedule 13E-4 is currently viewed as obsolete by the SEC. It was replaced in January 2000 by Schedule TO-I. This new form requires comparable information that was found on Schedule 13E-4 as well as a basic statement spreading out the terms of the issuer tender offer, the securities that the filer is offering to purchase, and whether the company accepts its financial condition plays a job in the decision to issue a self-tender offer. The company must determine the reason why it accepts that its financial condition does or doesn't play a job in that frame of mind to issue a self-tender offer.

Features

• Self-tender offers are commonly made when a company is attempting to fight off a hostile takeover endeavor.
• This new form requires comparable information that was found on Schedule 13E-4 as well as a starting statement spreading out the terms of the issuer tender offer, the securities that the filer is offering to purchase, and whether the company accepts its financial condition plays a job in the decision to issue a self-tender offer.
• Schedule 13E-4 was a form public companies were required to file with the Securities and Exchange Commission when they made tender offers for their own securities.
• Companies expected to present the form when the offer was made and it forced extra requirements on the issuer.
• The form was replaced in January 2000 by Schedule TO-I.