 Who benefits from bond tender offers in Europe?Abe de Jong, Peter Roosenboom and Willem Schramade Journal of Multinational Financial Management, 2009, vol. 19, issue 5, 355-369 Abstract: This paper investigates the wealth effects of European cash tender offers for bonds during the period from 1996 to 2005. European bond offers are made to refinance (35% of cases), to reduce debt (40%) or triggered by an ownership change (25%). We investigate the wealth effects to both bondholders and shareholders. Cash tender offers for bonds turn out to be value creating for firms; with bondholders taking most of the gains on a relative basis. We find no evidence of wealth transfers from shareholders to bondholders: bondholders are paid an average tender premium of 3.9% but shareholders do not experience a significant wealth loss. Shareholders even benefit from making refinancing bond tender offers after a drop in interest rates. The wealth effects to both bondholders and shareholders increase in the remaining time to maturity. This suggests that tendering the bonds, rather than waiting for them to mature, is a win-win situation for both types of security holders. Keywords: Bonds; Tender; offers; Repurchases; Financial; restructuring (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:19:y:2009:i:5:p:355-369 Access Statistics for this article Journal of Multinational Financial Management is currently edited by I. Mathur and G. G. Booth More articles in Journal of Multinational Financial Management from Elsevier |
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