بازخرید موجودی: چگونه شرکت ها بین پیشنهاد مناقصه خود و یک برنامه بازار ازاد انتخاب می کنند؟

In practice, open-market stock repurchase programs outnumber self tender offers by approximately 10–1. This evidence is puzzling given that tender offers are more efficient in disbursing free cash and in signaling undervaluation – the two main motivations suggested in the literature for repurchasing shares. We provide a theoretical model to explore this puzzle. In the model, tender offers disburse free cash quickly but induce information asymmetry and hence require a price premium. Open-market programs disburse free cash slowly, and hence do not require a price premium, but because they are slow, result in partial free cash waste. The model predicts that the likelihood that a tender offer will be chosen over an open-market program increases with the agency costs of free cash and decreases with uncertainty (risk), information asymmetry, ownership concentration, and liquidity. These predictions are generally consistent with the empirical evidence.

Stock repurchases are generally performed either with an open-market repurchase program (henceforth “an open-market program”) or a self-tender offer repurchase (henceforth “a tender offer”). With an open-market program, the firm announces its intention to buy back shares and then starts repurchasing shares in the open market over a long period of time (generally 1–2 years). With a tender offer, the firm offers its existing shareholders the opportunity to sell their shares back directly to the firm within a short period of time from the offer date (generally 1 month).1

This paper considers how firms that wish to repurchase their shares choose between a self tender offer and an open-market repurchase program. The model developed suggests that a tender offer encourages information acquisition among a subset of the shareholders, inducing information asymmetry. The resulting adverse selection requires the firm to pay a tender premium. This is not only costly to a manager–shareholder who cannot participate, but also results in wealth expropriations and in a dead-weight loss. An open-market program avoids this unattractive property of tender offers at the cost of slowing free cash distribution, which in turn results in partial free cash waste. A firm’s choice of repurchase method is socially efficient in the sense that a tender offer and the wealth expropriations it induces are the equilibrium outcome only if they represent the best alternative for all shareholders. The model suggests that in practice open-market programs prevail because, in general, the expected loss from the price premium of a tender offer is higher than the expected cash waste in an open-market program. The model also predicts that the likelihood that a tender offer will be chosen over an open-market program increases with agency costs of free cash and decreases with uncertainty (risk), information asymmetry, ownership concentration, and liquidity.