‘Mini-tender’ offers: how Aviva is involved and what investors should consider

You may never have heard of them before, but tender offers are in the news at the moment thanks to a brewing situation at UK-listed insurance business Aviva.  

If you have some prior knowledge of tender offers it may well be because you hold investment trusts.

A tender offer is when shareholders are given a chance to redeem their shares, often but not always, at a favourable price, either by a major shareholder or the company itself.

There can be several reasons behind why such an offer is being launched. The buyer may want greater control, or management may be repurchasing shares at a premium price to boost the share price. With investment trusts it can be intended to help address a discount to the value of their underlying assets.

Tender offers are usually completed in a pre-set timeframe at a set price. Sometimes the offer will involve all the shares in a company and in some cases, just a portion.

What has happened with Aviva?

The situation with Aviva is that US arbitrage firm Litani has launched what is called a ‘mini-tender’ offer, which is when less than 5% of the company’s stock is involved.

In Aviva’s case only 1% of the shares are participating and by staying below this threshold, it can bypass Aviva’s board and escape significant regulatory scrutiny.

This practice of mini-tender offers is more common in the US, and their Securities and Exchange Commission has put out warnings about this type of practice in the past.

Litani won a court case against Aviva back in December 2025 which allowed it to access the company’s register of shareholders. It has now contacted around 100,000 smaller Aviva shareholders directly, offering to buy their shares at 530p (a 17.5% discount to the market price) with zero commission or dealing charges.  

The US firm is offering to buy one million shares on a ‘first come, first served basis’ with an offer which expires in January 2027.

Litani made a similar approach to UK resident shareholders in Canada’s Sun Life Financial back in 2024. It emerged in the court proceedings between Aviva and Litani last year that, in that case, 582 Sun Life shareholders accepted the offer, with one subsequent complaint.

Aviva itself has written to shareholders recommending they reject the offer.

Aviva observes that offers like the one proffered by Litani “typically involve buying shares at a lower price and then selling them on at the full market price, allowing the buyer to make a profit at shareholders’ expense”.

The chief executive of the Financial Conduct Authority Nikhil Rathi says the regulator is tracking the situation with Aviva to ensure communications sent to investors are fair and clear.

Shareholders are under no obligation to accept

It is difficult to find much information about Litani online and it’s important to remember that shareholders are under no obligation to accept this sort of offer.

If they want to sell shares in a large FTSE 100 company like Aviva it should be straightforward to do so on an investment platform without having to accept any sort of discount, with trading costs that are likely to be substantially less proportionally than the 17.5% discount applied to Litani’s offer.