Tender Offer as a 409A Material Event: Impact on 409A Fair Market Value

The article provides a quick look at the impact of a tender offer on the 409A Fair Market Value (FMV) and the criteria used to assess whether it is considered a 409A material event. A tender offer is a type of secondary sale or purchase of securities, typically common stock, made by an investor, group of investors, or a third party. If the tender offer is deemed a 409A material event, the existing 409A FMV report may become outdated and require an updated report. In order to determine if the tender offer is an arm’s length transaction between unrelated parties, a comprehensive analysis of the offer and surrounding circumstances must be conducted. This analysis should consider several key factors, such as related parties, pricing, process, motivations, and conditions.