Stock Tender Offer and Stock Prices: Evidence from the Indonesian Stock Exchanges

Abstract

This study is to investigate the movement of stock price in a tender offer strategy by the firm. The ultimate of success and failure of tenders offers of a firm can be predicted by the stock prices movements. Twenty-three firms listed in Indonesian Stock Exchange are selected as a sample to be analyzed which carry out the tender offer during COVID-19 Pandemic period of year 2020 to 2022. The tender offer positively affects the stock price at the first day after tender offer period and the average stock price of one month period after the tender offer period. This study also shows that the difference between tender offer price and stock price of one day prior the tender offer period will negatively affect the stock price of one day after tender offer period and the average stock price of one month period after the tender offer period. The proportion of number of stocks to be offered in tender offer has no effect on stock price both in one day after stock tender offer period and the average stock price of one month period after the tender offer period. The result of the study is important for the stock market investors to get abnormal returns by buying stocks which will carry out a tender offer strategy and consider the motivation of firm to enhance the firm performance and good reputation of the prospective buyer.

Bid-Ask Spread, Market Value, and Return Risk on Stock Holding Period in the Banking Sector Listed on the Indonesian Stock Exchange (BEI) from 2018 to 2022

“…Fitriyah (2020) investigated the variation of return, market value, dividend, and earnings per share on bid-ask spread in Islamic stocks. This research also includes research on Economic Value Added (EVA) by Dhani and Mayasari (2020) and tender offer strategy by Indrayono (2022). Dhani and Mayasari found that the application of EVA has a positive impact on shareholder value, while research by Indrayono showed that tender offers can increase share prices.…”