However, the provisions of the corp

However, the provisions of the corporate charters rule out the possibility of such a stock repurchase. First, if the shares repurchased represent a partial liquidation of the firm, the corporate charter requires that both classes of stock be treated equally. Thus, any tender offer would be required to include both classes. Second, in some instances the courts have recognized cash disbursements by means of share repurchase at a premium price as a cash dividend. Again, that interpretation dictates that both classes be included in the tender offer. Third, many charters state that both classes shall be ‘treated equally in all matters’.
Finally, there is also empirical support for the view that the corporate charters prohibit, either directly or indirectly, such tender offers. We searched the Wall Street Journal Index for the years 1958-1978 and the index of the Commercial and Financial Chronicle for the years 194&1957 for any instances in which the firms in the sample were engaged in tender offers to repurchase shares of the class of common stock with superior voting rights on favorable terms. We found none.