Cash Tender Offers: Judicial Interpretation of Section 14(e)
In the past fifteen years, the frequency of corporate takeover attempts in the form of cash tender offers has increased dramatically. During most of this period, cash tender offers were outside the scope of the federal securities laws. It was not until 1968 that Congress amended the Securities Exchange Act of 1934 by passing the Williams Act for the express purpose of placing the, cash tender offer under federal regulation. Section 14(e), the antifraud provision of the Williams Act, has been much litigated in the short time since its passage, and the meaning of the section is slowly being clarified. This note is an analysis of a recent case from the Second Circuit Court of Appeals, Chris-Craft Industries,Inc. v. Piper Aircraft Corp., the leading case on section 14 (e), and of its ramifications concerning cash tender offers. The first part will treat cash tender offers and the legislation passed in 1968 in general, and the second part, Chris-Craft and its ramifications.