Stock Trading Before the Announcement of Tender Offers PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Stock Trading Before the Announcement of Tender Offers PDF full book. Access full book title Stock Trading Before the Announcement of Tender Offers by . Download full books in PDF and EPUB format.
Author:
Publisher:
ISBN:
Category : Insider trading in securities
Languages : en
Pages : 58
Get Book Here
Book Description
Author:
Publisher:
ISBN:
Category : Insider trading in securities
Languages : en
Pages : 58
Get Book Here
Book Description
Author: Gregg A. Jarrell
Publisher:
ISBN:
Category : Insider trading in securities
Languages : en
Pages : 50
Get Book Here
Book Description
Author: Daniel Asquith
Publisher:
ISBN:
Category : Tender offers (Securities)
Languages : en
Pages : 378
Get Book Here
Book Description
Author: Palani-Rajan Kadapakkam
Publisher:
ISBN:
Category : Closed-end funds
Languages : en
Pages : 29
Get Book Here
Book Description
Prior research has documented anomalous profits as high as 9% from participating in stock repurchase tender offers. The trading strategy is to buy shares in the market just before offer expiration and tender; it involves a trading horizon of just a few days. The large profits given a short trading horizon are puzzling, and this evidence raises serious questions about market efficiency. A possible reason inhibiting arbitragers from eliminating these profits is risk exposure. We examine whether trading profits are available in tender offer repurchases conducted by closed-end funds. Risk exposure concerns should be minimized for these offers, since the underlying assets of closed-end funds constitute a well-diversified portfolio of securities. We find significant tendering profits even in this sample, although the magnitude is much smaller at around 1%.
Author:
Publisher: Aspen Law & Business Publishers
ISBN:
Category : Business & Economics
Languages : en
Pages : 254
Get Book Here
Book Description
Author:
Publisher:
ISBN:
Category : Securities
Languages : en
Pages : 140
Get Book Here
Book Description
Author: Michael Arthur Firth
Publisher: Lexington Books
ISBN:
Category : Business & Economics
Languages : en
Pages : 208
Get Book Here
Book Description
Author: Arturo Bris
Publisher:
ISBN:
Category :
Languages : en
Pages : 53
Get Book Here
Book Description
Most of the theoretical literature on tender offers has been devoted to illustrating the positive effects of the toehold on the bidder's profits. Empirical research, however, shows that a high proportion of bidders do not trade on the target's shares prior to the tender offer announcement. This paper presents a model in which the bidder trades in the open market before announcing a tender offer and the incumbent shareholders form beliefs about the rival's quality given the order size. Market liquidity allows the potential bidder to partially hide her trade, and thus insiders are not able to ascertain whether an increase in volume indicates toehold acquisition. Stock price prior to the announcement date and market perception about the probability of a takeover are therefore contingent on players actions. We show that in some situations no trade will be optimal, and a negative relationship between takeover premium and toehold size arises. Interestingly, stock liquidity and initial stake are positively related. Our results also provide a theoretical basis for the observed pre-bid stock price dynamics. In particular, we show that the ratio between price runup and bid premium is increasing in the toehold size. The model's implications are then tested with a sample including tender offers in the US and the UK, estimating a bivariate generalization of the tobit model. We find a broad support for the model and significant differences across countries. We show that toeholds and probability of an acquisition are negatively related, and that companies in which the appropriation of private benefits of control is more likely have a higher probability of being taken over.
Author: Henry G. Manne
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 296
Get Book Here
Book Description
Author: George William Schwert
Publisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 68
Get Book Here
Book Description
This paper studies the premiums paid in successful tender offers and mergers involving NYSE and Amex-listed target firms from 1975-91 in relation to pre-announcement stock price runups. It has been conventional to measure corporate control premiums including the price runups that occur before the initial formal bid. There has been little evidence on the relation between the pre-bid runup and the post-announcement premium (the premium paid to target stockholders measured from the date of the first bid). Under what circumstances are runups associated with larger total premiums? The evidence in this paper shows that in most cases, the pre-bid runup and the post- announcement premium are uncorrelated (i.e. little or no substitution between the runup and the post-announcement premium), so the runup is an added cost to the bidder. This has important implications for assessing the costs of illegal insider trading based on private information about a potential bid.
