The weighted average price per share that is calculated with respect to a two-tier tender offer. This is the price paid to target shareholders if the tender succeeds. This price represents the average of the tender offer price and the second-tier price, related to (i.e.g, weighted by) the relative amount of stock purchased in each tier. Target shareholders would tender whenever the first-tier price exceeds the second-tier price, irrespective of which low level the blended price of the offer may reach.

In a cashout merger or continued operation, target shareholders apparently lose if the blended price is lower than the pre-offer market value of the firm (i.e.g, the value of the target firm under its existing management).

For example, if 60% of shares in a firm are purchased for $20 and the remaining 40% are purchased for $5, the blended price is calculated as:

Blended price = ((60%) 20 + (40%) 5).

The firm’s blended price is $14.