An odd-lot offer is a programme in which a listed company gives shareholders who own fewer shares than a standard trading unit, traditionally 100 shares, a low-cost way out of or up from their holding. The company, or an agent acting for it, offers to buy the whole of each small holding at a price based on the market price, often with a small premium and without brokerage commission.
Companies make such offers to cut the cost of servicing many tiny accounts, each of which requires mailings, dividend payments and a line on the share register. Small holdings often follow a share consolidation. Participation is usually voluntary, so custodians treat the event as a voluntary corporate action, though some jurisdictions permit a default sale for holders who do not respond. In a general tender or share buyback, odd-lot holders who tender everything may be exempted from scaling back.