How to Respond to Tender Offers (Warner Bros Example)

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With a tender offer someone is making an offer to purchase your stock, and as a rule of thumb, you should ignore the offer.

Presumably the person making the tender offer thinks it is better to hold the stock than have the cash, and there isn’t a reason to disagree with them. Typically by the time the offer has been made, the economic premium from the offer has already been factored into a now higher stock price.

Additionally, if you do accept the tender offer, it is the same as selling the stock; you would realize your highly appreciated gains and need to report them on your tax return for collection.

For these reasons, our default advice is to ignore tender offers.

Sometimes the tender offer is to purchase all the outstanding shares of a company at such a premium that the board of directors agrees that it is in the best interest of shareholders to sell. When that happens, your shares will be sold regardless of the action you take. If that happens, you can gift your shares to charity in advance of the sale to avoid realizing gains.

What inspired this particular article at this time is that a few of our clients hold highly appreciated shares of Warner Bros. Discovery (WBD) and have received the following notice from Schwab of a tender offer:

Your WARNER BROS DISCOVERY IN shares are subject to a(n) Tender Offer, which requires a decision. Please take time to review the terms of the offer.

This particular tender offer for Warner Bros has made the news due its drama which you can read about in “Paramount Makes Hostile Bid for Warner Bros. Discovery .” The Warner Bros board announced a deal to sell to Netflix, and Paramount is using this tender offer to try to takeover the company straight from the shareholders.

The latest news (as of December 17, 2025) is “Warner Bros. Discovery board urges shareholders to reject Paramount’s hostile takeover bid, throws support behind Netflix merger .”

In this case, the board is unlikely to force a sale and you are safe to simply ignore the tender offer.

Photo by Chase Yi on Unsplash. Image has been cropped.

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Chief Operating Officer, CFP®, APMA®

Megan Russell has worked with Marotta Wealth Management most of her life. She loves to find ways to make the complexities of financial planning accessible to everyone. She is the author of over 900 financial articles and is known for her expertise on tax planning.