If the answer is less than five percent, you're dealing with a mini-tender offer, and you should proceed with caution. Get a copy of the offering document. And be sure to read the disclosure carefully. Do not make an investment decision until you see the disclosure about the offer. Determine whether the bidder has adequate financing.
Some bidders make mini-tender offers because they can do so at virtually no cost.
These individuals often do not have the financing necessary to purchase the shares in the offer. Identify the current market price for your securities. For stock, you can easily get price information in many newspapers, on-line, or from your broker or investment adviser. For bonds and limited partnerships, you may need to talk with your broker or investment adviser because these prices may be hard to find. For limited partnerships, contact the general partner to get a list of firms that buy and sell the limited partnership, or ask your broker or investment adviser.