If shareholders of XYZ receive a letter advising them of an opportunity to sell their shares back at a specific price, what is XYZ conducting?

When shareholders receive a letter offering them the opportunity to sell their shares back at a specific price, XYZ is conducting a tender offer. A tender offer is a proposal by a company or an investor to purchase some or all of shareholders' shares at a specified price, usually at a premium to the current market price. This process is often undertaken to gain control of a company, reduce the number of outstanding shares, or return capital to shareholders.

The key aspect of a tender offer is the invitation for shareholders to sell their shares, making it distinct from other financial transactions where shares are traded in the open market or through different mechanisms. In this case, shareholders are being actively solicited to sell back their stocks under specific terms, emphasizing the nature of the tender offer.

In contrast, a leveraged buyout (LBO) involves acquiring a company using a significant amount of borrowed funds, typically with the goal of taking a company private, which does not match the scenario described. A repurchase agreement refers to a short-term borrowing mechanism where one party sells securities and agrees to repurchase them at a later date for a higher price, which is not relevant to shareholders selling shares back at a specified price. Lastly, a wash sale is a transaction that occurs when an investor