definition of the williams act
the williams act is a federal law enacted in 1968 that defines the rules of acquisitions and tender offers it came in response to a wave of hostile takeover attempts from corporate raiders making cash tender offers for stocks they owned cash tender offers threatened to destroy value by forcing shareholders to tender shares on a shortened timetable to protect investors senator harrison a williams of new jersey proposed new legislation that required mandatory disclosure of information regarding takeover bids it demands bidders include all details of a tender offer in filings to the securities and exchange commissions sec and the target company the filing must include the offer terms cash source and the bidder s plans for the company after the takeover investopedia yurle villegasbreaking down williams actthe williams act also includes time constraints that specify the minimum time an offer may be open and the number of days shareholders can make a decision the law was passed in response to a wave of unannounced takeovers in the 1960s this posed a threat to managers and shareholders who were forced to make critical decisions under unreasonable time pressure legislators passed the williams act and amended the securities exchange act of 1934 to protect affected parties from ongoing takeovers 