The announcement effects of off-market share repurchases in Australia
Source TitleAustralian Journal of Management
PublisherUNIV NEW SOUTH WALES, AUSTR GRAD SCH MANAGEMENT
University of Melbourne Author/sBROWN, CHRISTINE
Document TypeJournal Article
CitationsBrown, C. (2007). The announcement effects of off-market share repurchases in Australia. AUSTRALIAN JOURNAL OF MANAGEMENT, 32 (2), pp.369-385. https://doi.org/10.1177/031289620703200210.
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C1 - Refereed Journal Article
<jats:p> This paper investigates the price and volume behaviour around the announcement of a type of off-market repurchase (equal access repurchases) in Australia. In contrast to US studies which document abnormal returns of around 8% for off-market repurchases, we find much smaller but significant abnormal returns of around 1.2% on the announcement date for equal access repurchases. The evidence suggests that the abnormal returns are related to the discount-to-market price at which the offer is made (which reflects special taxation arrangements). We also document a dramatic increase in trading volume on the announcement and subsequent day and argue that this trading may be motivated by the level of tax benefits passed on to participating shareholders. </jats:p>
KeywordsBanking; Finance and Investment
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