What does "compulsory tender offer" mean?

The general theory of compulsory tender offer refers to the legal system that investors must issue a public tender offer to all shareholders of the target company in accordance with the law if they hold a certain proportion of shares or voting rights of the target company or increase their holdings within a certain period of time.

Although most countries have stipulated the compulsory tender offer system, there are different opinions on the idea behind the system.

There are many legislative examples of the compulsory tender offer system abroad, such as the Williams Act of 1968 in the United States and the Code of Mergers and Acquisitions in the City of London (London Code for short) in the United Kingdom. Hong Kong also has the Code of Takeovers and Mergers of Companies (referred to as the Hong Kong Code). In Chinese mainland, the Provisional Regulations on the Administration of Stock Issuance and Trading (referred to as the "Stock Regulations") and the Securities Law promulgated on February 29th, 1998 also made systematic provisions on the compulsory tender offer system in the chapter of "Acquisition of listed companies".