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Learning the wealth effects from equity carve-outs

Abstract : We investigate how the market can provide early signals about the eventual effects of an equity carve-out on the wealth of parent firm shareholders. Using a sample of equity carve-outs from 1985–2015, we show that most wealth information regarding the IPO valuation of a subsidiary is observable in the share returns of the parent firm during the book-building period. Our study therefore adds timing and process understanding to existing studies showing a wealth impact of equity carve-outs on parent company shareholders.
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https://hal-rennes-sb.archives-ouvertes.fr/hal-03004469
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Submitted on : Monday, August 22, 2022 - 11:51:47 AM
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Asad Iqbal Mashwani, Sébastien Dereeper, Michael Dowling, Saqib Aziz. Learning the wealth effects from equity carve-outs. Finance Research Letters, 2020, 33, pp.101191. ⟨10.1016/j.frl.2019.05.009⟩. ⟨hal-03004469⟩

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