Banking Terms - Set 3 (Straight through processing, Consent, PINK, Bid-Tender, Mini Tender)

Mini Tender

A mini-tender is an offer to acquire a company's shares directly from current investors in an amount less than 5% of issued stock.

E.g. Company A having a total share count of 100,000 at a market price of Rs.35 has announced a tender offer to purchase 10000 of the outstanding shares at a price value of Rs.37.

Bid-Tender

The tender offer which is a open offer or invitation by a prospective acquirer to all stockholders of a publicly traded corporation to tender their stock for sale at a specified price during a specified time usually the price will be above the market value. Here the shareholder will be given a biddable option wherein he can bid the price between a ranges of value issued by the issuer Or else he can also choose the option to tender for the price issued by the company itself.

E.g. Company A having a total share count of 10,00,000 at a market price of Rs.35 has announced a tender offer to purchase 2,00,000 of the outstanding shares at a price value of Rs.37 or bid the price the between 37 to 40 for tendering.       

PINK

A Corporate Action type [stands for Pay In Kind], which deals with Interest payment in any kind, except cash, distributed to holders of an interest bearing asset. It usually pays out in additional debt or equity, instead of cash. Payment-in-kind securities are attractive to companies/persons who would prefer not to make cash outlays instead wishing to have it in other formats/assets.

Example: A company which announces pay in kind event will be paying out its shareholders additional securities at a rate determined by the company.

Consent

This is a kind of corporate action which is a Procedure that aims to obtain consent of holder to a proposal by the issuer or a third party intended to progress on an event/action [which the company is intend to begin] to the next stage. In this method, the proposer of the resolution (usually, the company) signs the written resolution and sends it (as one or more copies) to other directors and/or shareholders who give their approval by signing it. When all the required signatures have been obtained, the action taken is documented by an entry in the firm's minute book.

For example, a company may require consent to tender their shares for CASH and the company may pay a consent fee for the holders who go with the tender option.

Straight through processing 

The capture of trade details directly from front-end trading systems and complete automated processing of confirmations and settlement instructions without the need for rekeying or reformatting data.