The determinants of tendering rates in interfirm and self-tender offers

Article Abstract:

The decision of shareholders to accept cash in fixed-price self-tender offers and two-tier interfirm tender offers is analyzed to find support for the proposition that shareholder valuations are heterogenous. The study specifically aims to identify the determinants of this heterogenity as manifested in tendering rates for cash in the two different transactions. Results reveal that tendering rates for both self-tender and two-tier offers are heavily influenced by the cash tender price relative to the stock's postoffer price. It is also shown that tendering rates are affected by proxies for the tax consequences of accepting cash, the level of institutional holdings and the level of managerial holdings.

Analysis, Stockholders

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A theory for the choice of exchange medium in mergers and acquisitions

Article Abstract:

The medium of exchange used to effect corporate mergers and acquisitions is studied. Analysis shows that stocks are used to purchase firms in situations in which the target company knows its value more precisely than does the acquiring company. Often the tax effects of the merger or asymmetric information on the part of the acquiring company makes the medium of exchange vitally important to the success of the merger. Mergers and acquisitions are analyzed as transacting processes that allow for varying types of negotiating (and bidding) and that include significant transacting costs based upon uncertainty.

Economic aspects, Corporate reorganizations

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The construction of tender offers: capital gains taxes and the free rider problem

Article Abstract:

Two-tier stock tender offers with a fully taxable first stage and a nontaxable second stage are intended to induce shareholders with low capital gains liabilities to accept the first stage of the offer, and shareholders with high capital gains tax liabilities to accept the second stage. High tendering rates occur in the first stage of two-tier offers in which the compensations for both stages are taxable.

Securities

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