minimum condition

USA

In the context of a two-step merger, the minimum condition generally refers to the buyer's requirement that stockholders of the target company tender enough shares during the tender offer, that when combined with the shares of stock that may already be owned by the buyer, will give the buyer a majority of the target's outstanding common stock at the time it accepts the shares for payment. In general, if the minimum condition is not satisfied, the buyer will not proceed with the transaction. Buyers often require that the determination of the majority of outstanding shares be measured on a fully-diluted basis (taking into account the conversion or exercise of all derivative securities, such as options and warrants).

For more information on tender offers, see Practice Note, Tender Offers: Overview (www.practicallaw.com/1-382-7403).