Share repurchase tender offers and bid-ask spreads

Hee Joon Ahn, Charles Cao, Hyuk Choe

Research output: Contribution to journalArticlepeer-review

13 Scopus citations


This paper examines the impact of share repurchase tender offers on the market microstructure. We find that there is a temporary reduction in the bid-ask spread, and a temporary increase in volume and quotation depth during the offer period. Our evidence suggests that the bid-ask spread is asymmetric during the offer period with the bid-side spread smaller than the ask-side spread. The temporary reduction in the spread around offers is consistent with the competing-market-maker hypothesis which predicts that the intensified competition for the market maker raises bid prices and narrows the spread asymmetrically during the offer period.

Original languageEnglish (US)
Pages (from-to)445-478
Number of pages34
JournalJournal of Banking and Finance
Issue number3
StatePublished - Mar 2001

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics


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