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DUTCH AUCTION VERSUS FIXED‐PRICE SELF‐TENDER OFFERS: DO FIRMS OVERPAY IN FIXED‐PRICE OFFERS?
Author(s) -
Peterson David R.,
Peterson Pamela P.
Publication year - 1993
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.1993.tb00125.x
Subject(s) - tender offer , dutch auction , stock (firearms) , economics , common value auction , monetary economics , expiration , stock price , fixed cost , business , fixed effects model , financial economics , microeconomics , econometrics , auction theory , revenue equivalence , panel data , finance , mechanical engineering , medicine , paleontology , corporate governance , series (stratigraphy) , biology , respiratory system , engineering , shareholder
We investigate differences in purchase premiums and returns of common stock the day following the offer expiration of firms conducting Dutch auction self‐tender offers versus those conducting fixed‐price self‐tender offers to see whether firms overpay for shares in fixed‐price offers. After controlling for the proportion of shares sought and firm size, no statistically significant differences in premiums or returns are found between the two types of offers.