A Comparison of the Information Conveyed by Equity Carve-Outs, Spin-Offs, and Asset Sell-Offs
Download or Read eBook A Comparison of the Information Conveyed by Equity Carve-Outs, Spin-Offs, and Asset Sell-Offs PDF written by Myron B. Slovin and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle.
Author | : Myron B. Slovin |
Publisher | : |
Total Pages | : |
Release | : 1998 |
ISBN-10 | : OCLC:1291275403 |
ISBN-13 | : |
Rating | : 4/5 (03 Downloads) |
Book Synopsis A Comparison of the Information Conveyed by Equity Carve-Outs, Spin-Offs, and Asset Sell-Offs by : Myron B. Slovin
Book excerpt: We examine valuation effects on firms in the same industry as entities that are the subject of carve-outs (initial public offerings of subsidiary equity), spin-offs, and asset sell-offs. Share price reactions for rivals are negative in response to equity carve-outs. In comparison, rival stock prices are positive for spin-offs and normal for asset sell- offs, restructuring actions that do not entail a public offering of equity. Our results suggest that managers conduct equity carve-outs when outside investors are likely to price the new shares higher than managers' perceived value.