A Dutch Auction can be used for a Tender offer. In a Dutch Auction, the firm no longer offers to repurchase shares at a single price, but rather announces a range of prices. Each shareholder thus must specify an acceptable selling price within the prescribed range set by the company. If he chooses a high selling price, he will increase the proceeds provided the shares are accepted by the company. But he also reduces the probability that shares will be accepted for repurchase. At the end of the offer period, the firm tabulates ‘the Book' of received offers, and determines the lowest price that will enable it to repurchase the desired number of shares.

(See Chapter 38 Share issues of the Vernimmen)

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