What is a tender offer in the context of acquisitions?

A tender offer is characterized by a public offer made by an acquiring company to purchase a certain number of shares from existing shareholders at a specified price, often at a premium above the current market price. This approach is utilized as a strategy to gain control of a target company by directly appealing to its shareholders rather than negotiating with the company’s management.

The process usually involves the acquirer stating the number of shares it intends to purchase and the duration of the offer, giving shareholders the option to sell their shares directly to the acquirer within that time frame. The goal of a tender offer is often to accumulate enough shares to exert control or influence over the target company's operations and decisions.

In contrast, other answer choices describe different aspects of corporate finance or acquisition methods, but do not accurately define the tender offer itself. For instance, an agreement to acquire assets may not involve shares or shareholder voting, while a conditional agreement based on regulatory approval does not capture the public nature and shareholder engagement inherent in a tender offer. Lastly, selling company shares on the stock exchange relates to public offerings and trading rather than the specific mechanism of a tender offer. Thus, the correct understanding of a tender offer revolves around the public solicitation for shares at a predetermined price, making the explanation of