Share issue privatizations as financial means to political and economic ends

Article Abstract:

Research was conducted to investigate the impact of political and economic factors on offer price, share allocation and other terms that governments choose upon privatizing state-owned enterprises through a public share offering. The study focused on the three sets of interrelated decisions that a government faces when structuring a share issue privatization (SIP) using a sample of 630 SIPs from 59 countries between 1977 and 1997. Results suggest that governments underprice SIP offers, impose control restrictions, use fixed-price offers rather than book building and tilt their share allocation patterns to favor domestic enterprises.

Other General Government Support, National Government Enterprises, Research, Management, Privatization, Privatization (Business), Government business enterprises, Public enterprises

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Wealth creation versus wealth redistributions in pure stock-for-stock mergers

Article Abstract:

The effects of pure stock-for-stock mergers were assessed through the use of data involving 260 pure stock-for-stock mergers conducted from 1963 to 1996. Conglomerate stock-for-stock mergers were found to be ineffective in generating financial consolidation or benefit bondholders at the expense of stockholders. On the other hand, marked net synergistic benefits were noted for companies engaged in nonconglomerate mergers.

Acquisitions Analysis, Conglomerate corporations, Economic aspects, Acquisitions and mergers, Financial analysis

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Another look at time-varying risk and return in a long-horizon contrarian strategy

Article Abstract:

Samples based on the post World War II period indicate no favorable timing characteristics for contrarian strategies, and study results support the approach of estimating betas conditioned by formation-period returns, after Kothari and Shanken. An attempt is made to reconcile issues of relative pricing put forward by DeBondt and Thaler, Chan, and Ball and Kothari.

Prices and rates, Stock-exchange, Stock exchanges, Stock price indexes

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