Dutch auction versus fixed-price self-tender offers for common stock

Kamma, Sreenivas; Kanatas, George; Raymar, Steven

doi:10.1016/1042-9573(92)90003-v

Cited by 26 publications

(20 citation statements)

References 15 publications

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“…This adjusted R2 is substantially higher than those reported by Kamma, Kanatas and Raymar [6] for expiration day returns for a combined sample of fixed-price and Dutch auction offers.…”

Section: Discussioncontrasting

confidence: 65%

Capital Gains Taxes and Stockholders' Response to Dutch Auction Tender Offers

Kadapakkam

Seth

1997

The Financial Review

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Capital gains taxes are conjectured to explain upward sloping supply curves in tender offers. This paper analyzes expiration day returns in Dutch auction tender offers to examine this conjecture. A proxy measure for the capital gains of the marginal tendering stockholder is constructed, based on tender offer size and daily price-volume history for one year. Cross-sectional regressions suggest that the tender price increases with the capital gains of the marginal tenderer, but only for firms with low institutional holdings. This is consistent with capital gains tax effects being relevant only when tax-exempt holdings are low.

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“…This adjusted R2 is substantially higher than those reported by Kamma, Kanatas and Raymar [6] for expiration day returns for a combined sample of fixed-price and Dutch auction offers.…”

Section: Discussioncontrasting

confidence: 65%

Capital Gains Taxes and Stockholders' Response to Dutch Auction Tender Offers

Kadapakkam

Seth

1997

The Financial Review

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“…And in 70 percent of the fixed price RTOs and 90 percent of the Dutch auction RTOs where insiders tender or sell shares they do not reveal their intentions to tender (or sell). 171 In other words, insiders avoid signaling to public shareholders that the actual value is below the offer price. Such signaling would cause public shareholders to tender more shares, reducing insiders' participation in the high price RTO.…”

Section: Evidence Of Insider Trading Rtosmentioning

confidence: 99%

Insider Signaling and Insider Trading with Repurchase Tender Offers

Fried

2000

SSRN Journal

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“…1313Comment and Jarrell (1991) find a three‐day return of 7.5%. Kamma, Kanatas, and Raymar (1990) find a 6.6% return, with 86% positive on the announcement day.…”

mentioning

confidence: 94%

“…1515Kamma, Kanatas, and Raymar (1990) find a −1.3% average abnormal residual at the expiration, with 30% of the expiration abnormal returns positive.…”

mentioning

confidence: 96%

Dutch Auction Repurchases: An Analysis of Shareholder Heterogeneity

Bagwell

1992

The Journal of Finance

193

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This paper documents that firms face upward‐sloping supply curves when they repurchase shares in a Dutch auction, and it analyzes the market reaction to these offers. The announcement price increase is highly correlated with the ultimate repurchase premium. Prices decline at expiration only for pro‐rated offers. The cumulative return is positive and highly correlated with the repurchase premium, excepting pro‐rated offers. Much of this price increase is consistent with movement along an upward‐sloping supply curve. Trading volume around the Dutch auction parallels fixed‐price repurchases. Supply elasticity is larger for firms with large trading volume, firms included in the S&P 500 Index, and takeover targets.

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Dutch auction versus fixed-price self-tender offers for common stock

Cited by 26 publications

References 15 publications

Capital Gains Taxes and Stockholders' Response to Dutch Auction Tender Offers

Capital Gains Taxes and Stockholders' Response to Dutch Auction Tender Offers

Insider Signaling and Insider Trading with Repurchase Tender Offers

Dutch Auction Repurchases: An Analysis of Shareholder Heterogeneity

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