2016-12-26T14:59:35

This paper investigates the rationale behind interlirm tender offers by examining the returns realized by the stockholders of lirms that were the targets of unsuccessful tender offers and lirms that have made unsuccessful offers. Our results suggest that the permanent positive revaluation of the unsuccessful target shares [documented by Dodd and Ruback (1977) and Bradley (1980)] is due primarily to the emergence of and/or the anticipation of another bid that would ultimately result in the transfer of control of the target resources. We also find that the rejection of a tender offer has differential effects on the share prices of the unsuccessful bidding firms depending upon whether the tender offer process results in a change in the control of target resources. On the basis of these results we conclude that acquisitions via tender offers are attempts by bidding firms to exploit potential synergies, not simply superior information regarding the 'true' value of the target resources.

In this paper we examine the ex-dividend day returns of several taxable and non-taxable distributions.The ex-dividend day returns for the taxable common stocks are consistent with the hypothesis that dividends are taxed more heavily than capital gains. However, the cx-dividend day returns of preferred stocks suggest that preferred dividends are taxed at a lower rate than capital gains; non-taxable stock dividends and splits are priced on ex-dividend days as if they are fully taxable; and non-taxable cash distributions are priced as if investors recetve a tax rebate with them. We also find that each of these distributions exhibits abnormal return behavior for several days surrounding the ex-dividend day. We investigate several possible explanations for this anomaly, but none is capable of explaining the phenomenon.

This paper examines possible motives for and consequences of voluntary corporate liquidations. Specitically. the procedural and tax diff'erences between voluntary liquidations and other controlchanging transaction devices are analyzed. An empirical investigation of successful liquidations shows that the announcement of liquidation reduces the risk of liquidating shares. that the shareholders receive substantial gains from successful liquidations, and that the average gains to the acquiring shareholders are not significantly different from zero. These findings suggest that the liquidating firms' assets have been underutilized before liquidation and that voluntary liquidations lead to higher-valued reallocations of corporate resources. 'We would like to thank C.