Odd-lot tender

How the money is made

• 1The offer publishes an odd-lot clause with its threshold, almost always 100 shares.
• 2You buy just under that threshold, in a single account.
• 3You tender, expressly claiming the exemption.
• 4You are accepted in full while everyone else is prorated.

What to watch

• That the clause genuinely exists in the offer document: it is neither automatic nor mandatory.
• The exact threshold, and whether it is measured per account or per holder.
• The deadline for having the shares registered in your name.
• Commissions: at these sizes they eat the profit easily.
• Whether your broker will process the tender, and at what cost.

Typical risks

• The clause does not exist, or is dropped in the final offer document.
• Commissions exceed the expected gain.
• Splitting the position across accounts is usually expressly prohibited.
• If the offer lapses, you are left holding the shares.