It is foreseeable that one of the first questions on your selling shareholders’ minds after the transaction window closes on your tender offer may be “when will I receive my money?” Shareholders that participate in a tender offer may want to see the proceeds of their tender sale hit their bank accounts as soon as possible. For companies, several business days may seem like a reasonable amount of time to coordinate the settlement process between your company, bank and wirehouse. For shareholders, several business days may seem like an eternity.
Paying out your shareholders quickly and efficiently is an important part of the tender offer experience for two reasons:
- It delivers a better experience to your shareholders. If you’re planning on running future tender offers or, like many companies, you’ve made recurring liquidity an important part of your equity compensation strategy, quick transaction settlement can help encourage future participation among your employees. Also, if you’re bringing on a new investor through your liquidity program, faster settlement can help to inspire confidence in your company’s ability to deliver liquidity in an orderly manner.
- It helps you quickly update your cap table. As soon as stock shares are tendered, your company’s equity composition will be totally different. Until your cap table is fully updated, you may not have a clear view of what that new composition looks like. Streamlining the settlement process can help close that gap and ensure your cap table is fully updated.
One of the key benefits of the Shareworks platform is our automated tender offer processing feature. The Shareworks feature automatically processes any share sales, purchases or exercises and sends that money out to participants on the day of their tender offer transaction once final taxes have been calculated. The Shareworks platform automatically updates your records and existing cap table, meaning your cap table is clean and ready to run immediately for your CFO and any new investors you have added to the cap table..
Automated processing is just one of the many features that companies value when looking at the Shareworks platform. To learn more about the benefits of conducting liquidity events with us, or to request a demo of our platform, please contact us.