What happens to my position if the company offers tender offer?
When a company makes a tender offer, shareholders are permitted to sell their shares at a specified price within a designated window period. Any scale-back of the tender offer may be applied in accordance with the terms and conditions of the offer.
This corporate action affects Investments Accounts and Leveraged Accounts differently, and shareholders must take specific actions to participate.
What is a tender offer?
A tender offer allows you to sell your shares at a specified price within a set window period.
Any scale-back of the tender offer may be applied in accordance with the terms and conditions of the offer.
Key terms explained
Before you participate in a tender offer, it helps to understand these terms:
| Term | What it means |
| Tender price | The price per share the company is offering to pay you. This is set by the company and stated in the offer. |
| Election | Your choice to participate (or not participate) in the tender offer. When you submit an election, you're telling us whether you want to sell your shares. |
| Scale-back | When more people want to sell than the company wants to buy, the company may reduce the number of shares each person can sell. This means you might not be able to sell all your shares. |
| Custodian | The financial institution that holds and manages your shares on your behalf. We send your election to them to complete the sale. |
| Open positions | Trades you currently have active in your Leveraged Account. These are positions you have not yet closed. |
| Short position | When you've sold shares you don't own, expecting the price to fall so you can buy them back cheaper later. With a short position, you owe shares to someone else. |
| Closing price | The final price at which your position ends. In a tender offer, the tender price becomes your closing price. |
| Liable to be taken up against | If you have a short position, you must provide shares at the tender price. Your position will automatically close at the tender price if you don't close it yourself first. |
What happens to my Investments Account?
How will I know about the tender offer?
If you qualify, our corporate actions team will email you with:
- The terms of the tender offer
- Important dates (tender offer window period, IG deadline, payment date)
- Available options
How do I participate?
Step 1 - Review the email Check the terms, dates, and your available options.
Step 2 - Reply before the deadline Reply to the corporate actions team email address with your chosen option before the IG deadline stated in the email.
What happens if I accept the tender offer?
When you accept the tender offer for cash:
- The tender price becomes your closing price
- Your shares are blocked after the deadline to prevent duplicate selling
- We hand over your election to our custodian for execution
- Cash is posted to your account on the announced payment date (or a couple of days after)
What happens to my Leveraged Account?
How will I know about the tender offer?
If you qualify, you will receive:
- An email notification from our corporate actions team
- An election form on My IG via Live accounts > Corporate actions
Both contain the terms, important dates, and available options.
How do I participate?
Step 1 - Log in to My IG Use a computer or laptop to access My IG.
Step 2 - Navigate to Corporate actions Go to My IG > Live accounts > Corporate actions.
Step 3 - Review and submit View the event terms and submit your chosen option before the IG deadline.
Step 4 - Modify if needed (optional) You can change your election anytime before IG's deadline.
What happens if I accept the tender offer?
When you accept the tender offer for cash:
- The tender price becomes your closing price for open positions
- Your profit and loss are calculated using the tender price as closure
What if I have a short position?
If you hold a short position, you will be liable to be taken up against. Your position may be closed at the tender price if you do not close out before the deadline.
Frequently Asked Questions
1. What happens if I don't respond to the tender offer?
Your shares will remain unchanged if you don't respond.
The default option for tender offers is typically No Action, which means we will not tender your shares. Check your tender offer notification to confirm the default option.
2. Can I tender only some of my shares?
Investments Account: Yes. You can tender from 1 share up to all your shares.
Leveraged Account: No. You must tender your entire position or none of it.
3. Is there a minimum or maximum number of shares I can tender?
Investments Account:
- Minimum: 1 share
- Maximum: All shares you hold
You choose how many shares to tender within this range.
Leveraged Account: There is no partial tendering. You must tender your complete position or keep all of it.
4. What happens if I have the same stock in both accounts?
You must submit a separate election for each account:
- One election for your Investments Account
- One election for your Leveraged Account
Each account is treated independently.
5. Are there any fees for participating?
No. Participation is free of charge.
6. What happens if I miss the IG deadline?
The default option will be automatically applied to your account.
7. Why is the IG deadline earlier than the company deadline?
Our deadline is 24 to 48 hours earlier than the market deadline.
We need this time to:
- Collect all client elections
- Forward them to our custodian
- Ensure they reach the market before the company's deadline
8. How long does the tender offer process take?
The timeline varies by company. Key dates include:
- Announcement date - when the tender offer is first announced
- IG deadline - when you must submit your election to us
- Market deadline - when the company closes the offer
- Payment date - when cash is posted to your account
All dates will be specified in your tender offer notification.
9. Can I still trade the stock during the tender offer period?
Yes, you can trade normally until the IG deadline.
On the deadline: We will lock the shares you elected to tender. You cannot sell these locked shares until the tender offer completes. This prevents you from accidentally selling the same shares twice.
10. What happens if the tender offer is oversubscribed?
If more people want to sell than the company wants to buy, a scale-back may occur. This means:
- You may not be able to sell all the shares you offered
- The company will apply their scale-back rules (stated in the offer terms)
- You will keep any shares that were not accepted
The specific scale-back calculation depends on the company's tender offer terms.
11. Can I change my election after the IG deadline?
In most cases, no. Once the IG deadline passes, we submit your election to our custodian. Changes after this point require custodian approval, which is rarely granted.
If you need to make changes, contact our corporate actions team immediately. We cannot guarantee changes will be possible.
12. What confirmation will I receive after submitting?
Investments Account: You will not receive automatic confirmation. If you need confirmation that we received your election, contact our corporate actions team.
Leveraged Account: Your election will appear immediately on My IG > Live accounts > Corporate actions.
13. What documentation will I receive after completion?
You will not receive a separate tender offer document.
You can view the transaction in your account history on My IG.
14. What currency will I receive?
The payment currency is specified in the tender offer details we send you. Check your tender offer email or My IG for this information.
15. What happens if the company cancels the tender offer?
If the company cancels the tender offer:
- We will unblock your shares immediately
- Your shares will remain in your account
- You can trade them normally again
16. Are there tax implications?
You must consult your tax advisor for guidance specific to your situation. IG does not provide tax advice.
Important: This information is a generic example and subject to change. It may not apply in every scenario. |
