DUTCH AUCTION VERSUS FIXED-PRICE SELF-TENDER OFFERS - DO FIRMS OVERPAY IN FIXED-PRICE OFFERS

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 over-pay 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.