Businesswoman talking on a cell phone
Also known as offer alert, offer notification is a process that involves contacting investors about an opportunity to buy newly available shares. In the past, this type of notification was often made via phone calls to registered investors to be notified when and how shares became available. Since the advent of the Internet, an auction notice is typically structured to include an online delivery service that not only notifies investors of open auction opportunities, but also helps manage the purchase of those shares.
Many companies require an investor who wishes to receive an offer notice to submit what is known as an offer request. While the process varies, the order generally must include some detail about the minimum number of shares the investor wishes to purchase. Using this approach is sometimes referred to as closed bidding, as only those who are properly registered will receive notifications.
An alternative approach to bid notification is known as competitive bidding. With this option, anyone can receive notifications, including current investors who have not expressed an interest in purchasing more shares. Both approaches generally provide all the data necessary to proceed with a purchase if the recipient wishes. With some systems, it may be possible to respond to the notification to initiate the purchase, while others will require the use of a broker to initiate and complete the transaction.
Government agencies may also use an offer notification process to provide information to interested parties about pending bond options and similar opportunities. By registering in the bidding process management system, it is possible to know when and how opportunities are made available and how to proceed with purchasing management. Information about different auction opportunities is sometimes processed in the same system, allowing potential investors to be informed about opportunities associated with several different agencies.
One of the advantages of modern tender notification is that the recipient does so in more or less real time. This allows investors to learn about opportunities as soon as they become available and possibly take advantage of the opportunity to buy before all shares are paid for. In this perspective, the notification of the tender helps to reduce the time and effort that investors must make in following up on certain opportunities, since the notifications provide all the data necessary for an informed decision.