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Also known as a tender alert, a tender notification is a process that involves contacting investors regarding the opportunity to purchase shares of stock that have recently become available. In times past, this type of notification would often occur by means of placing telephone calls to investors registered to be notified when and as shares were made available. Since the launch of the Internet, a tender notification is usually structured to include an online delivery service that not only notifies investors of open tender opportunities but also aids in managing the purchase of those shares.
Many companies require that an investor who wishes to receive a tender notification submit what is known as request for tender. While the process varies, the request normally must include some detail regarding the minimum number of shares that the investor would like to purchase. Use of this approach is sometimes referred to as a closed tender, since only those that are properly registered will receive the notifications.
An alternative approach to tender notification is known as an open tender. With this option, anyone can receive the notifications, including current investors who have not expressed an interest in acquiring more shares. Both approaches will usually provide all the data necessary to proceed with a purchase if the recipient is so inclined. With some systems, it may be possible to actually respond to the notification in order to initiate the purchase, while others will require utilizing a brokerage to initiate and complete the transaction.
Government agencies can also make use of a tender notification process to provide information to interested parties on pending bond options and similar opportunities. By registering with the system used to manage the tendering process, it is possible to know when and as opportunities are made available as well as how to go about managing the purchase. At times, information on a variety of tender opportunities are processed through the same system, allowing potential investors to be made aware of opportunities associated with several different agencies.
One of the benefits of modern tender notification is that those who receive the communications do so in more or less real time fashion. This allows the investors to learn of the opportunities as soon as they are available and possibly take advantage of the chance to buy before all the shares are disbursed. From this perspective, tender notification helps to reduce the time and effort investors have to take in monitoring certain opportunities, since the notifications provide all the data necessary to make an informed decision.
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