THE DETERMINANTS OF TENDERING RATES IN INTERFIRM AND SELF-TENDER OFFERS

We estimate the determinants of shareholder heterogeneity by examining the shareholder responses to fixed-price self-tender offers and two-tier interfirm tender offers. Tendering rates are increased in the cash price relative to the postoffer price of the stock. Proxies for capital gains' tax liabilities also explain tendering rates. Controlling for the cash tender relative to the postoffer price of the stock, we find that tendering rates are significantly higher in interfirm tender offers than in self-tender offers, which indicates that shareholders view accepting another firm's stock as an unattractive means of avoiding capital gains.