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InvestHub.com's
Finance Dictionary and Glossary of Investment Terms

hedged tender  

Definition 1.

The short sale of some portion of the shares in a tender offer to protect against the risk of loss in the event that all tendered shares are not accepted.
 

Definition 2.

A strategy in a tender offer where an investor short sells a portion of the shares they own. This is to protect against the risk of loss in the event that the tender offer does not go through.
 

Definition 3.

An investor sells a portion of a stock holding short a tender offer in the event all shares tendered are not accepted. For example, investor Q has 5000 shares of XYZ. An acquiring company makes a tender offer of $100 a share when the shares are currently worth $80. Investor Q short-sells 2500 shares after the announcement and the price of the stock has approached $100. Company XYZ purchases only 2500 of the original shares at $100. Investor Q has sold all shares at $100 even as the price of the stock drops on a post-news dip.
 
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