Two-step Merger A hybrid method of acquiring a company by combining a
tender offer with a
merger. In the first step, the buyer initiates a tender offer to acquire a majority of the outstanding target company’s stock. In the second step, the buyer completes a
back-end merger to acquire the balance of the target company’s stock. Usually, the consent of stockholders representing a majority of the remaining shares (which the buyer holds after the tender offer) is necessary to accomplish the back-end merger and acquire the target company. If at least 90% of the target company’s stock is acquired in the tender offer, the acquirer can effect a
short form merger and squeeze out remaining stockholders.
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Squeeze-Out
https://en.wikipedia.org/wiki/Squeeze-out
A squeeze-out[1] or squeezeout,[2] sometimes synonymous with freeze-out (freezeout),[2] is the compulsory sale of the shares of minority shareholders of a joint-stock company for which they receive a fair cash compensation.
This technique allows one or more shareholders who collectively hold a majority of shares in a corporation to gain ownership of remaining shares in that corporation. The majority shareholders incorporate a second corporation, which initiates a merger with the original corporation. The shareholders using this technique are then in a position to dictate the plan of merger. They force the minority stockholders in the original corporation to accept a cash payment for their shares, effectively "freezing them out" of the resulting company.
Short-form Merger
Also known as a parent-subsidiary merger, a short-form merger is a
merger between a
parent company and its substantially (but not necessarily wholly) owned
subsidiary, with either the parent company or the subsidiary surviving the merger. A short-form merger does not require approval of the stockholders of the subsidiary. The requirements of a short-form merger are dictated by state statute.
If a buyer acquires less than 100% (but generally at least 90%) of a target company's outstanding stock, it may be able to use a short-form merger to acquire the remaining minority interests. The merger allows the buyer to acquire those interests without a stockholder vote, thereby purchasing all of the target company's stock. This merger process occurs after the stock sale closes, and is not a negotiated transaction.