Tender offer premium

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Tender offer premium

The premium offered above the current market price in a tender offer.

Tender Offer Premium

A tender offer made above the fair market value of the offering.
References in periodicals archive ?
Signaling theory, as it relates to share repurchase program announcements, largely begins when Masulis (1980a) finds positive announcement period returns around tender offers, Dann (1981) finds the positive returns do not come at the expense of other security classes, and Vermaelen (1981) finds the positive returns increase with increases in tender offer premiums, the fraction of shares sought, and the fraction of shares held by insiders.
Thus, we find support for the signaling hypothesis; that is, large tender offer premiums and high insider ownership appear to signal positive news to market participants.
Specifically, we find inside ownership and tender offer premiums positively and significantly relate to announcement period returns.
Sarkar, 1989, "Managements' View on Share Repurchase and Tender Offer Premiums," Financial Management l8, 97-110.
We follow Vermaelen (1981) and calculate the tender offer premium as the difference between the tender offer price and the closing stock price five days prior to the initial announcement of the tender offer standardized by the closing stock price five days prior to the offer for fixed-price offers.
30 per diluted share) to reflect tender offer premiums paid and the prior unamortized debt issuance fees.
One of Largest Tender Offer Premiums Ever in Japan Firm that Achieved the Sale of Other Company at 119% Premium in 2010 Accomplishes Similar Feat
This represents one of the largest tender offer premiums ever offered in Japan and the second time in 12 months Symphony has received over 100% premium in a tender offer.
9) Although the average percentage of shares sought in the self-tender offers is larger in Tax Regimes II and III, tender offer premiums are lower, which is consistent with taxes on capital gains influencing the premiums offered in self-tender offers.
This section presents a simple theoretical model of the tendering decision and describes the linear regression that we use to investigate the determinants of tender offer premiums.
In addition, tender offer premiums may also be lower for stocks that trade more often because investors' cost bases will be closer to the stocks' current market values.
15) We, therefore, hypothesize that tender offer premiums may be inversely related to institutional ownership, because many institutional investment managers have little or no tax disincentive to tendering their shares and thereby realizing a capital gain.