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Author :
Publisher :
ISBN 13 :
Total Pages : 58 pages
Book Rating : 4.3/5 (512 download)
Download or read book Stock Trading Before the Announcement of Tender Offers written by and published by . This book was released on 1987 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Gregg A. Jarrell
Publisher :
ISBN 13 :
Total Pages : 50 pages
Book Rating : 4.:/5 (825 download)
Download or read book Stock Trading Before the Announcement of Tender Offers written by Gregg A. Jarrell and published by . This book was released on 1987 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Palani-Rajan Kadapakkam
Publisher :
ISBN 13 :
Total Pages : 29 pages
Book Rating : 4.:/5 (31 download)
Download or read book Trading Profits in Closed-end Fund Tender Offers written by Palani-Rajan Kadapakkam and published by . This book was released on 2008 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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 : Daniel Asquith
Publisher :
ISBN 13 :
Total Pages : 378 pages
Book Rating : 4.:/5 ( download)
Download or read book Essays on Tender Offers written by Daniel Asquith and published by . This book was released on 1992 with total page 378 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Arturo Bris
Publisher :
ISBN 13 :
Total Pages : 53 pages
Book Rating : 4.:/5 (129 download)
Download or read book When Do Bidders Purchase a Toehold? Theory and Tests written by Arturo Bris and published by . This book was released on 2000 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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 :
Publisher : Aspen Law & Business Publishers
ISBN 13 :
Total Pages : 254 pages
Book Rating : 4.F/5 ( download)
Download or read book U.S. Regulation of the International Securities and Derivatives Markets written by and published by Aspen Law & Business Publishers. This book was released on 2002 with total page 254 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Michael Arthur Firth
Publisher : Lexington Books
ISBN 13 :
Total Pages : 208 pages
Book Rating : 4.:/5 (31 download)
Download or read book Share Prices and Mergers written by Michael Arthur Firth and published by Lexington Books. This book was released on 1976 with total page 208 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Alan J. Auerbach
Publisher : University of Chicago Press
ISBN 13 : 0226032167
Total Pages : 354 pages
Book Rating : 4.2/5 (26 download)
Download or read book Corporate Takeovers written by Alan J. Auerbach and published by University of Chicago Press. This book was released on 2013-12-30 with total page 354 pages. Available in PDF, EPUB and Kindle. Book excerpt: The takeover boom that began in the mid-1980s has exhibited many phenomena not previously observed, such as hostile takeovers and takeover defenses, a widespread use of cash as a means of payment for targeted firms, and the acquisitions of companies ranking among the largest in the country. With the aim of more fully understanding the implications of such occurances, contributors to this volume consider a broad range of issues as they analyze mergers and acquisitions and study the takeoveer process itself.
Author : George William Schwert
Publisher :
ISBN 13 :
Total Pages : 68 pages
Book Rating : 4.X/5 (2 download)
Download or read book Mark-up Pricing in Mergers and Acquisitions written by George William Schwert and published by . This book was released on 1994 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Author :
Publisher :
ISBN 13 :
Total Pages : 140 pages
Book Rating : 4.:/5 (12 download)
Download or read book New York Stock Exchange Tender Offers, 1956-1966 written by and published by . This book was released on 1967 with total page 140 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Henry G. Manne
Publisher :
ISBN 13 :
Total Pages : 296 pages
Book Rating : 4.:/5 (49 download)
Download or read book Insider Trading and the Stock Market written by Henry G. Manne and published by . This book was released on 1966 with total page 296 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Marc I. Steinberg
Publisher : Praeger
ISBN 13 : 089930088X
Total Pages : 0 pages
Book Rating : 4.8/5 (993 download)
Download or read book Tender Offers written by Marc I. Steinberg and published by Praeger. This book was released on 1985-08-22 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The issues confronting the Securities and Exchange Commission, the courts, Congress, and securities and corporate lawyers regarding tender offers are examined in this timely collection of commentaries. New data is introduced on how to regulate tender offers and proxy contests for control of publicly held companies. In addition, the constitutional dimensions of state anti-takeover statutes, target managements's conduct in fending off hostile bidders, the SEC's advisory committee report of recommendations on tender offers and SEC tender offer rules are reviewed. Insider trading in the tender offer context and proposals for tender offer reform are also explored. Readers will learn what states are doing to regulate takeovers and what inside counsels should suggest when their firms become targets. They will also discover how target management's conduct is viewed and where further regulation will be most likely to occur.
Author : Judith H. McQuown
Publisher :
ISBN 13 :
Total Pages : 280 pages
Book Rating : 4.4/5 (91 download)
Download or read book Playing the Takeover Market written by Judith H. McQuown and published by . This book was released on 1982 with total page 280 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : G. William Schwert
Publisher :
ISBN 13 :
Total Pages : 51 pages
Book Rating : 4.:/5 (129 download)
Download or read book Mark-Up Pricing in Mergers and Acquisitions written by G. William Schwert and published by . This book was released on 2008 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Author : David Camino Blasco
Publisher :
ISBN 13 :
Total Pages : 16 pages
Book Rating : 4.:/5 (129 download)
Download or read book Deregulation, Insider Trading and Tender Offers written by David Camino Blasco and published by . This book was released on 2002 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines insider trading operations and the transmission of information to markets, during the merger and firm acquisition process, that followed the deregulation and restructuring of the Spanish electrical sector, who began in 1993 and is still under way in many countries of the European Union (Green Paper, 2001). In particular, we will study the events surrounding the 1996 acquisition of FECSA and Sevillana de Electricidad, two of the Spanish biggest electricity suppliers and distributors, by ENDESA, a formerly state owned company and the nation's largest power supplier. We use public trading records around the announcement date of the event to track abnormal returns, market volumes and spreads and to isolate individual transaction records by broker, from the flow of background trading, permitting the analysis of the market's reaction to the onset of informed trading. Because the insider information was not revealed to other market participants until the event, and even rumors of the acquisition were publicly and officially denied, this case presents a unique laboratory for studying the dissemination and incorporation of private inside information into market prices. Unlike earlier studies that make use of daily transactions and concentrates on how informed trading affects stock prices, this paper also analyzes individual insider purchases within the trading day. We examine excess returns on the days of illegal insider trading and how this trading is conducted in terms of average trade volume, frequency of transactions, average spread and brokerage firm. The findings reported in the paper shed some light in the process by which the market incorporates and infers information from insider trading in a case of industry restructuring. The relationship between insiders' purchases can be documented on a day-by-day basis, by trade, firm and broker, but we can't go beyond that information (i.e., naming the insiders) except in the few cases where a preliminary penalty file was opened and concluded, by the CNMV. Nevertheless, our results have a number of implications for models of market microstructure, as the reaction of prices to insider operations prior to the announcement day, the way insiders operate on average, with large and frequent limit and market orders and quick sales after the run-ups.
Author : Jason Tuan
Publisher :
ISBN 13 :
Total Pages : 6 pages
Book Rating : 4.:/5 (129 download)
Download or read book Merger Arbitrage Profitability in China written by Jason Tuan and published by . This book was released on 2007 with total page 6 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the profitability of merger arbitrage strategies in China. Additionally, it examines the presence of insider trading in the target company, prior to the announcement of the Mamp;A offer, in the Chinese stock market. Using a sample of 22 tender offer bids (from January 2002 to December 2006) and applying standard event study methodology, we find that the average cumulative abnormal return (CAR) from a portfolio, which purchases long the target firm is significant at positive 17.7%, for voluntary tender offers (from day -30 to the announcement day 0). However, the average CAR form day 0 to the resolution day is significant at negative -4.14%. For mandatory tender offer, both the pre- and post-announcement average CAR are not statistically significant. These results suggest that there is no opportunity for investors to profit from a post-announcement long only strategy. In addition, the significant pre-announcement price appreciation followed by post-announcement negative return suggests insider trading. Finally, the pattern of CAR for mandatory tender offers is different from that for voluntary offers, where the mandatory tender offer events have no impact on the share price of target firm.
Author : Skander Lazrak
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (11 download)
Download or read book Market Microstructure Around Three Corporate Announcements written by Skander Lazrak and published by . This book was released on 2005 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis examines various aspects of the market microstructure around three important corporate events. These important corporate events are stock splits, corporate acquisitions and earnings announcements. The second chapter (first essay) investigates the microstructure effects of stock splits. We find that the price range theory explains the stock splits of high price stocks and information plays an essential role in the explanation of stock splits for low price stocks. While global liquidity decreases post-split, trading activity as measured by the number of trades increases. The temporary component of the spread increases while the directional change for the permanent component is indeterminate. Uninformed traders intensify their trading activities relatively more than informed traders after stock splits. While the probability of new information arrival remains unchanged, the probability of a bad event and of informed trading decreases after stock splits. In addition, temporary volatility increases while true price volatility decreases post-split. Consistent with the extant literature, stock splits attract small or uninformed traders. Whether attracted by the lower per-share price, the newly promoted stock or the decrease in the probability of informed trading, uninformed traders are the essential cause of the increase in trading activity, trading cost and return volatility after stock splits. The third chapter (second essay) investigates the microstructure effects of acquisitions. The intensification of trading activity upon announcement of such offers is more dramatic for targets than for bidders. Investors are more inclined to sell targets upon announcement using direct market orders against ask limit orders when the tender offers involve cash due to portfolio rebalancing and profit realization motives. Liquidity improves for targets with a fall in trading costs, and with an increase in quoted dollar and share depth. Both trading costs and quoted depth fall continuously over the tender offer cycle to successful completion for the acquirers. Increased trading causes the temporary trading cost to fall farther for targets than for acquirers. Permanent trading costs decline over the tender offer cycle, and especially for targets for cash tender offers and for acquirers for share tender offers. These findings based on method of payment are related to the good and bad news, respectively, that are revealed by the announcement and realization of the tender offer, respectively. The fourth chapter (third essay) analyzes trading on the various trading venues for Canadian firms that are cross-listed on the main US trading venues around earning announcement dates. We first show that the Canadian trading venues lost their trade advantage in terms of trade cost compared to their US counterparts for trading Canadian cross-listed shares. However, the Canadian market still retains the dominant part of trade volume and Canadian dealers offer greater market depth. There is also no preference ordering among the top three US listing venues for Canadian shares based on trade cost. Both trading legs have similar proportions of informed trading during off-announcement days. They both react simultaneously to earnings news. However, on announcement day, most informed traders trade on the domestic Canadian market. We claim that the domestic Canadian market is much more informative during announcement dates than its US competitors.
