Restructuring through spinoffs: the stock market evidence

Article Abstract:

Spinoffs appear to perform better than average in investment terms in the long term, with parent firms also following this trend which appears to follow and be linked with spinoff restructuring. Takeover activity is at its peak in the initial two years where parent firms are concerned, but is later, in the second and third years for spinoffs. Spinoffs appear to create value mainly by offering a means to switch control of the assets of a company to companies involved in acquisitions.

Security and commodity exchanges, Analysis, Measurement, Subsidiary corporations, Subsidiaries, Stock-exchange, Stock exchanges, Management

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Share repurchases and firm performance: new evidence on the agency costs of free cash flow

Article Abstract:

The information signaling hypothesis and the free cash flow hypothesis were considered to account for the actions of investors to announcements of stock repurchases. Data from a sample of 242 tender offers of both Dutch auction type and fixed-price between 1978 and 1991 was used to assess firm performance before and after stock repurchase announcements. Results show the free cash flow hypothesis to account for favorable investor response to stock repurchase announcements.

Investor Relations, Financial Management, Research, Cash flow, Stock redemption, Tender offers (Securities), Tender offers

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