two-step merger

two-step merger
USA
A hybrid method of acquiring a company by combining a tender offer with a merger. In the first step, the buyer initiates a tender offer to acquire a majority of the outstanding target company's stock. In the second step, the buyer completes a back-end merger to acquire the balance of the target company's stock. Usually, the consent of stockholders representing a majority of the remaining shares (which the buyer holds after the tender offer) is necessary to accomplish the back-end merger and acquire the target company. If at least 90% of the target company's stock is acquired in the tender offer, the acquirer can effect a short-form merger and squeeze out remaining stockholders.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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