Williams Act

DEFINITION of 'Williams Act'

A federal act passed in 1968 that defines the rules of acquisitions and tender offers. The Williams Act requires the bidders to include all details of a tender offer in their filing to the SEC and the target company. Their filing must include the offer terms, cash source and the bidder's plans for the company after the takeover.

BREAKING DOWN 'Williams Act'

The Williams Act also includes time constraints that stipulate the minimum period of time an offer may be open and the number of days after the offering in which shareholders have the right to change their minds. In the 1960s, a large number of takeovers occurred unannounced. This situation created difficulties for managers and stockholders who were forced to make crucial decisions with very little preparation. The Williams Act was created to protect investors from these occurrences.

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