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The informational role of tender offer stock repurchases: Evidence from institutional ownership
Journal article   Peer reviewed

The informational role of tender offer stock repurchases: Evidence from institutional ownership

Mitchell Ratner, Samuel Szewczyk and George Tsetsekos
Journal of business finance & accounting, v 23(5,6), pp 869-880
01 Jul 1996

Abstract

Business ownership Economic models Regression analysis Stock redemptions Studies Tender offers
A paper tests the proposition that announcements of tender offer repurchases have greater informational value for firms with low institutional ownership. It is reported that an inverse relationship between the magnitude of announcement period abnormal returns and the level of institutional ownership in the repurchasing firm. The evidence also suggests that firms with low institutional ownership are more likely to announce repurchase tender offers. After controlling for industry and firm size, it is found that firms announcing repurchase tender offers have lower institutional ownership than a control sample of firms.

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