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Tenders - How Online Tenders Procuring Is Better Than The Traditional Way!

23rd June 2010
By Emilyralph in Business Law
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A tender offer is nothing but a "takeover bid" in corporate finance world. Basically, a company makes a tender offer, which is a public offer of stock and provides details such as minimum and a maximum number of shares that are to be tendered, the price and the time period in which bids can be placed on that offer. Whether companies like to admit it or not, sometimes a takeover is the only way for a company to survive and be able to thrive again. Although, it's a hostile way by which a bigger company take over simply to gain control of a smaller company, but sometimes it helps the smaller companies to survive the fierce competition of the corporate world. So, they are usually most popular when a company begins to waiver a bit.

This generally begins with offering of tenders. Every existing shareholder is generally approached with an offer to buy their shares of company stocks. Few of them will agree in lieu of making high profits. The process has become quite simpler with the advent of the Internet. So, earlier what used to take weeks if not months to complete the tendering process, now takes few days to complete. Earlier companies had to send out offers to each shareholder individually, set a cut off date for a response, and then wait for all responses to come in. Now, all this is handled online saving your time and vital resources.

There may be more than one company sending out tenders as well, and if the shareholder decides to sell, they have many offers to choose from. The key is to be the company making the best offers, and get all the shareholders to sell to you. Tender offers can be confusing at times, especially if you are not experienced in the corporate world. There are also mini-tender offers that allow a company to bid on shares, but only end up owning less than 5% of the company. This allows bidders to avoid the complex investor protections that would be held to bidders, in case, they end up owning more than 5% of the company.

Another advantage of the online bidding is that it brings more benefits to buyers as well as sellers. Buyers can simply post online tender offers. This helps them save money on things like advertising, stationary and postage. And the seller, on the other hand, is able to evaluate all the bids quicker and easier. Bids on online tenders can easily be changed at any point before the stipulated time frame ends. This is not only easy to use, but is customer friendly as well. Although some people may question the security of online tenders, it is actually more secure than the old traditional way. It is free from the problems arising out of bids falling into the wrong hands.

Therefore, the online tenders are extremely important to the corporate world and are the easy route towards making necessary acquisitions.

Emily Ralph is an independent small business consultant who advises and counsels small business owners and helps them. To access more information about small business manufacturer, tenders and b2b buying leads visit
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