Use this URL to cite or link to this record in EThOS: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.322736
Title: Dual-class shares, initial public offerings and the market for corporate control
Author: Hoffmann-Burchardi, Ulrike
ISNI:       0000 0001 3579 9981
Awarding Body: London School of Economics and Political Science
Current Institution: London School of Economics and Political Science (University of London)
Date of Award: 2000
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Abstract:
This dissertation focuses on two central capital market transactions, takeovers and initial public offerings (IPOs), from both a theoretical and an empirical point of view. After an introductory chapter, the first two chapters analyse how minority shareholders are affected by a change in take-over regulation (introduction of the mandatory bid rule) in Germany in 1995. The last chapter focuses on the pricing and timing of going-public transactions. Chapter 2 focuses on the absolute wealth effect of the mandatory bid rule and formalises the trade-off minority shareholders of corporate raiders face with respect to the adoption of a mandatory tender offer after a shift in control. Under plausible assumptions about the distribution of security and control benefits, minority shareholders of acquirers profit from the adoption of the mandatory bid rule. A subsequent empirical study supports this hypothesis by measuring the stock price effects after the acceptance of the German Takeover Code. Chapter 3 uses a dataset of German dual-class shares during 1988-1997 to study how the change of corporate governance rules affects the price differential between voting and non-voting stock. First, the chapter discusses how mechanisms to separate control from cash-flow rights relate to the value of control. Second, the chapter analyses how minority voting and non-voting shareholders participate in transfers of corporate control under the alternative regulatory structures pre- and post- 1995. By providing an analysis of sequential going-public decisions. Chapter 4 outlines conditions under which the likelihood of a second IPO increases after a first firm has gone public ('hot issue markets'). Two effects can trigger the rise of hot issue markets in a setting with asymmetric and costly information about both firm quality and industry prospects: risk-induced selling pressure and informational free-riding on the industry news conveyed by a first IPO. Finally, the model offers an explanation for the empirical finding that hot issue markets exhibit a higher degree of underpricing than cold issue markets.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID: uk.bl.ethos.322736  DOI: Not available
Keywords: Takeovers; Shareholders; Corporate governance Economics International trade Finance Taxation
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