Exchange Offer

Exchange offer - An exchange offer is an exchange offered of securities from one company for the securities of another. The exchange offer could be the exchange of bonds or preferred stock in one company for common shares in another company. However it could also mean that one company has just issued a new bond and wants to exchange that for earlier series of their own stock, which remains outstanding. The security holder may or may not be taxed for the exchange depending upon the securities, which have been exchanged. For an example of an exchange in 2001 AT&T exchanged shares of AT&T Wireless Group from its shareholders in exchange for AT&T Corp shares.