Definition of williams act

federal legislation enacted in 1968 that imposes requirements with respect to public tender offers. It was inspired by a wave of unannounced takeovers in the 1960s, which caught managers unawares and confronted stockholders with decisions they were ill prepared to make, The Williams Act and amendments now comprise Sections 13(d) and 14(d) of the securities exchange act of 1934. The law requires the bidder opening a tender to file with both the Securities and Exchange Commission and the target company a statement detailing the terms of the offer, the bidder's background, the cash source, and his or her plans for the company if there is a takeover. The same information is required within 10 days from any person or company acquiring 5% or more of another company. The law mandates a minimum offering period of 20 days and gives tendering shareholders 15 days to change their minds. If only a limited number of shares are accepted, they must be prorated among the tendering stockholders.