Market reaction to tender offers: Insights from China

doi:10.52396/JUST-2021-0172

Abstract

Abstract: This article studies the tender offers of Chinese A-share listed companies. We apply the nonparametric method and the piecewise-linear regression model to indicate that the pricing of offers has an anchoring effect. We find that the historical returns positively affect the post-offer price premium. Besides, We use the logistic regression model to find that historical returns significantly influence the success rate of the acquisition. We adopt the event study methods to show that the abnormal return and the abnormal trading volume reach their peaks on the announcement day, revealing the possible existence of informed traders in tender offers.

Key words: anchoring effect, announcement effect, acquisition premium, corporate finance, Chinese market, tender offer

CLC Number:

F832.5

WANG Yuchen, QIAN Yuanchen. Market reaction to tender offers: Insights from China[J]. Journal of University of Science and Technology of China, 2021, 51(12): 894-911.

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