The weighted average price that is paid to stockholders in a two-tier tender offer. For instance, if 60% of shares are purchased for $25 each and the remaining 40% of shares are acquired for $20 each, the blended price is:
Blended price= $25 (60%) + $20 (40%) = $23
The blended price could also be calculated for bonds when a company contemplates retiring its debt. In calculating the price at which bonds would be retired by different possible methods (tender price, equity clawback, annual debt call, etc.)
This price is, then, multiplied by the percentage by which a respective method is used. Eventually, the percentage weighted figures are added up, and the resulting figure is the blended price. The following example illustrates this:
| Buyback method | % of debt retired | Buyback price |
|---|---|---|
| Tender price | 50% | 130 |
| Equity clawback | 40% | 120 |
| Annual debt call | 10% | 110 |
| Blended price | 124 |
