The Use of Open - Market Repurchase Programs in France

Following the recent French reform on open-market repurchase programs, we investigate the buy and sell behaviour by firms on their own shares. Unlike American studies, we can construct a sample of really bought, sold and cancelled shares for each firm per month. These data come from the registration at the " Commission des operations de bourse (COB) " equivalent to the American SEC. Five standard behaviours of firms are established (cancellation, large purchase, buy-sell, large sale and low activity). With this classification, we observe the impact of the open-market repurchase program on three major financial variables : ownership structure, dividend payment and stock return. Concerning, the relation between ownership structure and firm repurchase behaviour, we note a less concentrated ownership structure for the firms cancelling their shares. In the same way, the dividend substitution hypothesis does not seem effective for the cancellation firms sample. Lastly, we do not distinguish any long-run abnormal returns for all the kinds of repurchase behaviour.