ShmoopTube

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Finance a la shmoop, what is the all holders rule? No this is not about

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post-coital rules of engagement.. The holder here is about those holding stock [Two peoples heads pop out from under a duvet and a stop sign appears]

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in a company in this case likely holding stock in a company where a contentious

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takeover bid has come in from the cold cruel world outside with a bidder [Pacman]

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wanting to pay $17 and 23 cents a share for about a $2 premium over where the

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stock was trading yesterday while a rival set of shareholders want more like

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20 bucks a share to sell the iPod hearing aid company to just you know [Billboard for the iPod hearing aid company]

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sell and go away. Well the all holders rule came along as part of the 1934 Act

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if the SEC was establishing granular rules so that the legally [Two people in suits walking down a corridor]

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unsophisticated weren't turned into lunch when the hungry Wall Street wolves [A wolf appears and drags one of them away]

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got a hankering for deals. So what's the rule with all holders, well it's simply

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that all holders of the same exact class of security. i.e. basic common stock have

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to be offered the same deal that is one offer can't be given to the people who [Good offer document is given to Company A]

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wanted to sell at just 17 dollars and 23 cents and then some other punitive deal [Bad deal given to Company B]

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like is offered to the others like you know.. if you don't take this by 4:00 p.m.

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next Thursday we'll teepee your homes and then offer at most 16 bucks a share [Angry looking guy in a suit]

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going down a dime a week until you say uncle, or aunt yeah well that's the all

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holders rule. All holders get the same deal.

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