Differentiated bids for voting and restricted voting shares in public tender offers

Article Abstract:

The stocks of a company are classified according to shares with voting rights and shares with restricted voting rights. Takeover bid prices for these shares vary and fetch higher premiums over common shares. A study was conducted on why takeover bids are different and why there are large premiums. The transaction cost model was applied on data taken from differentiated bids transacted in Sweden from 1980 to 1990. The resulting theories conclude that block holder actions greatly influence takeover bid prices and that premiums are higher when there are fewer A or B shares for sale. One empirical result shows that there are more equal bids than there are differentiated bids.

Evaluation

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IPO underpricing as tax-efficient compensation

Article Abstract:

Underpricing of initial public offering(IPO) serves as indirect tax-efficient compensation of investors in Sweden. This relationship was exemplified by changes in tax regulation in Sweden in 1990 resulting to a decrease in average initial return from 41% in the 80's to 8% in the 90's. Also, the relatively large average initial return in the 80's maybe due to the taxing of underpricing as a capital gain but after 1990, underpricing was classified as an ordinary income and was subjected to ordinary income tax.

Public Finance Activities, Securities Taxes, Taxation, Finance, Sweden, Securities, Corporations, Tax policy, Going public (Securities), Initial public offerings, Corporate finance

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Takeover bids and the relative prices of shares that differ in their voting rights

Article Abstract:

A study was conducted on the relative prices of shares that differ only in their voting rights. A model based on Swedish stock market data was established. The results indicate the dependence of the value of the voting rights on the initial ownership distribution, share structure and ability of the incumbent manager against a rival for control. The results also indicate that voting premia reach their highest during periods of frequent takeover activity.

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