Defining Tender Offer under the Williams Act
![handle is hein.journals/brklr53 and id is 199 raw text is: DEFINING TENDER OFFER UNDER THE
WILLIAMS ACT
I. INTRODUCTION
Congress passed the Williams Act in 1968 to regulate the
acquisition of controlling positions in publicly-held corpora-
tions.2 Any person who purchases3 or offers to purchase4 more
than five percent of a corporation's equity securities5 must dis-
1 Pub. L. No. 91-567, 82 Stat. 454 (1968); Pub. L. No. 90.439, 82 Stat. 454 (1983)
(codified at 15 U.S.C. §§ 78m(d)-(f and 78n(d)-(f) (1982)) [hereinafter respectively re-
ferred to as § 13(d)-(f) and § 14(d)-(f)1.
2 The Williams Act only applies to the acquisition of:
equity securit[ies] of a class which [are] registered pursuant to section 12 of
this title, or any equity security of an insurance company which would have
been required to be so registered except for the exemption contained in section
12(g)(2)(G) of this title, or any equity security issued by a closed-end invest-
ment company registered under the Investment Company Act of 1940.
§ 13(d)(1) and § 14(d)(1), 15 U.S.C. § 78m(d)(1) and § 78n(d)(1) (1982).
- Section 13(d)(1) provides:
Any person who, after acquiring directly or indirectly the beneficial ownership
of any [qualifying] equity security.., is directly or indirectly the beneficial
owner of more than 5 per centum of such class shall, within ten days after such
acquisition [make the requisite disclosures set forth at text accompanying note
6 infra].
§ 13(d)(1), 15 U.S.C. § 78m(d)(1) (1982).
4 Section 14(d)(1) provides:
It shall be unlawful for any person, directly or indirectly, by use of the mails or
by any means or instrumentality of interstate commerce or of any facility of a
national securities exchange or otherwise, to make a tender offer for, or a re-
quest or invitation for tenders of, any [qualifying] class of an equity security
. . ., unless at the time copies of the offer or request or invitation [make the
requisite disclosures set forth at text accompanying note 6 infra].
§ 14(d)(1), 15 U.S.C. § 78n(d)(1) (1982).
As originally passed, the Williams Act applied to acquisition of ten percent of a
registered corporation's equity securities. Pub. L. No. 91-567, 82 Stat. 454 (1968). In
1970, Congress lowered the threshold level to five percent, Pub. L No. 91567, § 1(a),
and Pub. L. No. 91-567, § 3, to provide public disclosure of impending corporate take-
overs at a more meaningful leveL HR REP. No. 1655, 91st Cong., 2d Ses. 1 (1970),
reprinted in 1970 U.S. CODE CONG. & AD. NEws 5025, 5027. In a cursory fashion the
House report stated:
An investment of between 5 and 10 percent of the securities of a company can
have a significant impact on the public market for that company's stock.
Shareholders of the target company are entitled to full disclosure when over 5
percent of their company's stock is to be acquired by an outside group. These
acquisitions may lead to important changes in the management or busine--3 of](ViewImageLocal?handle=hein.journals/brklr53&div=19&collection=journals&method=preview&ext=.png&size=3)
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Defining Tender Offer under the Williams Act
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