T. A. Ngerebo-A
Offer for sale by tender is one of the methods of offering ordinary shares of firms to the investing public, by which investors are given the privilege to tender, not subscribe, as they desire. However, this research paper examines some critical issues have arisen from the application of this method. The research is purely theoretical and therefore has used hypothetical figures to address the matters arising. From the theoretical analysis, it was found that the use of offer for sale by tender, as currently practiced is faulty because it abuses the individual intrinsic values of shares and has high chance of the issuing firm losing money, which would usually be recovered through an offer of the shares at a premium. The Paper recommends that the shares should be allotted and allocated by strictly respecting the tenders of prospective investors.
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