Tender offer premium

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 ?
Additionally, SXCP assumed and immediately paid down $99.9 million of SXC's outstanding term loan debt and $171.4 million of SXC's 7.625 percent senior notes, inclusive of an $11.4 million tender offer premium.
As a result of the debt extinguishment and tender offer premium, SXCP expects to recognize between $15 million to $18 million of additional interest and financing expense in second quarter 2014.
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.
Column 2 displays results from the first regression, which establishes our base model in which in addition to year fixed effects and a constant, we include the tender offer premium, the percentage of shares sought, the percentage ownership of the top five executives, and firm size as explanatory variables.
CARs are positively related to the tender offer premium (the coefficient on PREMIUM is 0.312, t-statistic = 5.31) and to insider ownership (the coefficient on INSIDE is 0.060, t-statistic = 2.64) and are negatively related to tender offers defensive in nature (the coefficient on DEFENSE is -0.041, t-statistic = -3.82).
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.
Tax experts believe that a "tender offer premium"(9) is the best measure of the size of discount for minority interests.
In a takeover, a tender offer premium is that value paid to the target firm's shareholders that is over and above the stock's fair market value.
We also find that the information conveyed by the offer, measured by the post-expiration appreciation of the firm's stock, is contained in the tender offer premium, and that offer premiums are inversely related to firm size and to pre-offer stock performance.
We include the post-offer price appreciation of the firm's shares ([PostApprec.sub.it]) divided by one minus the capital gains tax rate, [TaxRate.sub.t], as an independent variable to determine if the anticipated re-valuation of the shares is built into the tender offer premium. Actual post-offer price appreciation serves as a proxy for expected appreciation.
(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.