All-Holders Rule

AAA

DEFINITION of 'All-Holders Rule'

An SEC regulation that requires a tender offer to be made available to all holders of the identical class of the security. The All-Holders Rule is specified in Rule 14d-10 of the Securities Exchange Act of 1934, which specifies equal treatment of security holders. This rule is especially important during takeover bids, ensuring that any tender offers made by the acquiring company cannot be directed to only those shareholders in favor of the takeover.

INVESTOPEDIA EXPLAINS 'All-Holders Rule'

For example, if company ABC has tendered an offer to buy back its B class shares, then all holders of this class must be allowed to participate in the buy back. The SEC does not require ABC to offer this buy back to the shareholders of its other classes.

A corollary to the All-Holders Rule is that the consideration paid to all security holders who tender their securities should be the highest or "best price." This is intended to prevent some security holders receiving a lower price for their securities than others in a tender offer.

RELATED TERMS
  1. Takeover

    A corporate action where an acquiring company makes a bid for ...
  2. Shareholder

    Any person, company or other institution that owns at least one ...
  3. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
  4. Tender Offer

    An offer to purchase some or all of shareholders' shares in a ...
  5. Hostile Takeover

    The acquisition of one company (called the target company) by ...
  6. Best-Price Rule - Rule 14D-10

    An SEC regulation that stipulates that a tender offer is open ...
Related Articles
  1. Investing Basics

    SEC Filings: Forms You Need To Know

    The forms companies are required to file provide a clear view of their histories and progress.
  2. Insurance

    Free Markets: What's The Cost?

    Some argue that when the free market fails to protect consumers, government regulation is required.
  3. Bonds & Fixed Income

    An Overview Of Corporate Bankruptcy

    If a company files for bankruptcy, stockholders have the most to lose. Find out why.
  4. Options & Futures

    Can Insiders Help You Make Better Trades?

    Find out why the trading activity of owners and executives can be a valuable trade-confirmation tool.
  5. Fundamental Analysis

    What is the difference between EBIT and operating income?

    Read about some of the subtle differences identified by the SEC between earnings before interest and taxes, or EBIT, and operating income.
  6. Fundamental Analysis

    What kind of financial reporting requirements does GAAP set out?

    Look at some of the major financial reporting requirements set forth by the generally accepted accounting principles and the required financial statements.
  7. Economics

    America's Most Notorious Corporate Criminals

    Learn about the crimes and punishments of some of the most infamous convicted white-collar crooks.
  8. Economics

    The Economic Impact of Better US-Cuba Relations

    We examine what the normalization of relations between the US and Cuba will mean for the two countries' economies.
  9. Options & Futures

    When short selling, how long should you hold on to a short?

    Explore the reasons for short selling and the various factors that influence how long an investor may wish to maintain a short position.
  10. Investing Basics

    Why does GAAP require accrual basis rather than cash accounting?

    Discover why GAAP requires the accrual basis for accounting rather than the cash basis, and learn why it is important for investors and lenders.

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center