Self-Tender Defense

You run a public company that specializes in providing fruit juice colonics. A major hedge fund has decided that it wants to take your company private and replace its management (meaning you). For obvious reasons, you don't want this to happen.

Your stock is trading at $10 a share. The hedge fund launches a tender offer for your shares at $12 a share. The move means they will pay any of your shareholders $12 for their shares, an attempt to get a large enough stake in the company that they can force the takeover to take place.

Time to fight fire with fire. You launch your own tender offer, buying shares back from your own shareholders to prevent the hedge fund from getting them.

The strategy is called a self-defense tender. It's the corporate equivalent of licking all the cookies so you can eat them all. A self-tender defense consists of the target of a hostile takeover starting its own tender offer, counteracting the tender being run by the firm attempting to achieve the acquisition.