ROFR vs ROFO: How to Compare a Match-the-Offer Process with a First Bid

Compare a ROFR match-the-offer process with a ROFO first-bid process before you sign a private-company shareholders’ agreement under the law of England and Wales. A match lets continuing holders buy on a third-party offer already in hand. A first bid invites an offer before any outside sale, and the seller may reject it. Clause 8 only says the shares are offered first. Mark the blanks, then rewrite or do not sign.

That wording leaves the choice open. Continuing holders either match terms already agreed with an outsider, or they bid before any outside sale. Clause 8 reads: “No Shareholder may transfer Shares unless it first offers them to the other Shareholders.”

A half-match is not enough on its own. A family-trust gift stays in the clause, the articles still apply, and a refusal does not allow a cheaper sale. Each of those points is unwritten.

Disclaimer: Checkory provides AI support, not legal advice. Consult a qualified lawyer for binding decisions.

Which process does “offered first” name?

A match is a right to match: third-party terms come first. A first bid may be rejected. See Norton Rose Fulbright. DWF, on 26 June 2026, says a match follows an offer already received, and a first bid may start with no offer yet (DWF, 26 June 2026). HFW, on 11 January 2019, draws the same distinction (HFW).

Section 561 is allotment pre-emption on new equity securities, not a transfer of shares already in issue. As at 20 October 2026, the page still limits the section to allotment. Clause 8 cannot use that rule.

What must a match-the-offer notice include?

On a match, clause 8 needs a bona fide third-party offer, a notice of the full terms, and an election period. It states none of the three. The Companies Act 2006 does not set the number of days.

LexisNexis says the other shareholders take the shares on the same or substantially the same terms, before a transfer to someone who made a bona fide offer. See LexisNexis on a right of first refusal. A typical mistake is to treat “offered first” as if the offer, the notice, and the period were already drafted.

DWF, on 24 March 2026, says the original offer is often required to be bona fide and that the time frames must be drafted. See DWF, 24 March 2026. Do not copy a business-day window from a Florida or Texas note, or a price ceiling from South African practice.

What outside sale survives a refused first bid?

On a first bid, mark an internal offer, a right to reject it, and the outside-sale test in the draft. A refusal does not allow a cheaper sale. Clause 8 does not say whether the later sale must be better, equal, or cheaper. Write the test you mean.

Norton Rose allows the outside sale only on terms better than the rejected offer. LexisNexis requires a greater price, and the seller need not name a buyer. See LexisNexis on a right of first offer.

DWF’s March 2026 test is different: not more favourable than the terms first offered, so the seller may sell on equal terms, but not on a better deal for the buyer. Clifford Chance, on 12 September 2023, uses the same or a higher price and no more favourable terms, inside a defined period. See Clifford Chance. Clause 8 picks none of these tests.

How do several holders share the sale shares?

Share the stake only as the clause states. Divide it among the continuing holders, and allow extra shares only if the text gives an oversubscription right. Partial take-up, completion, and the lapsed window need separate sentences.

In Standing v Power [2021] EWHC 1744 (Ch), Stevens & Bolton records the proportion among members other than the seller. The court left the seller’s shares out. The company offered 13 of 85. A forced sale needed buyers for every sale share, and extra shares existed only because the articles gave them.

For example, a sale by the 42% holder is split between 33% and 25%. Counting the seller is the error in that case. Clause 8 gives no partial take-up and no oversubscription. If the window is blank, silence is not a waiver. Do not invent three months or copy a nine-month lease tail. The Stevens & Bolton note cites Arden LJ in Jones v BWE International Ltd [2003] EWCA Civ 298, who calls for care on price and on whether notice was triggered.

Which transfers skip the process, and do the articles match?

List every transfer that skips the process, and say whether a gift is on the list. Put the same process in the articles and the shareholders’ agreement. A family-trust gift stays inside clause 8 unless a permitted-transfer sentence says otherwise.

Maybrook, on 2 December 2024, says a gift is a transfer, and a skip for family, a family trust, or a controlled entity exists only if you write it. See Maybrook. Model article 26 lets directors refuse to register an instrument of transfer, and it sets no match, no first bid, and no permitted-transfer list.

Taylor Wessing, on 3 October 2024, treats the skip as a list you draft: a spouse or civil partner, children, trustees of a family trust, and a family investment company. See Taylor Wessing. DWF in June 2026 adds the same shareholder’s vehicle, an intra-group transfer, and a deed of adherence. Section 33 binds the company and the members. The agreement binds signatories only. A trading-contract assignment is a different clause: assignment and change of control.

Who wants a match, and who wants a first bid?

Holders who intend to stay usually want a match, because the price has been market-tested. A likely seller usually wants a first bid, because the seller may reject. In practice, DWF’s June 2026 note calls a match more common in private equity. That is practice, not a statute.

Co-sale, also called tag-along, lets a minority sell alongside a major holder. Compare it with drag-along in drag-along versus tag-along. Take the log in order: the process, the notice, the outside-terms test, allocation and the lapsed window, permitted transfers, and the same process in the articles. Marking the blanks does not finish the clause. Rewrite those sentences or do not sign.