DemiseShareRepurchases-并购模型.pdfVIP

The demise of share repurchases * J. Fred Weston and Juan A. Siu The Anderson School at UCLA, Los Angeles, CA 90095, USA Draft: July 21, 2003 Abstract Early share repurchases made substantial use of fixed price tender offers and Dutch auctions with event returns of 10% to 15%, signaling undervaluation. During the 1980s, buybacks were mostly open market repurchases (OMRs) with high positive event returns whose persistence may be related to subsequent repeated announcements occurring every 1 to 3 years. Studies of share repurchases during the 1990s are consistent with the hypothesis that a major motive was to offset the dilution effects of the exercise of stock options. These findings were also supported by the public statements of major companies that share repurchases were used to support their stock prices and by reductions in equity shares outstanding over the years by many firms. The growth of share repurchases took place after 1980 when the number and percentage of firms paying dividends decreased. Dividend payers were predominantly large, mature firms. Also earnings and dividend payments were concentrated in 25 firms which accounted for over 50% of the totals for all industrials by 2000. A relatively small number of firms also accounted for a high concentration of share repurchases by the late 1990s. Early repurchases moved stock valuations toward their intrinsic values; later repurchase programs may have contributed to overvaluation and overinvestment. JEL classification: G30, G32, G35 Keywords: Share repurchases; Dividends; Payout policy * Corresponding author. UCLA-AGSM, 258 Tavistock Ave., Los Angeles, CA 90049-3229, USA. Tel: +1-310-476-5220; fax: +1-310-476-9471. E-mail address: john.weston@ (J. F. Weston). bel