Determinants of the nature of the second event in European equity carve-outs
Equity carve-outs (ECOs) are temporary structures in almost two thirds of all cases. This chapter pursues two objectives. First, it analyses the frequency of the various types of second events for a sample of European ECOs. Sell-offs occur more often in Europe than in the US, potentially driven by differences in the development states of European vs. US financial markets: European markets may have a lower market capacity and may also produce lower quality information for the parent firm before the ECO, necessitating a partial float of the subsidiary firm even if a sell-off is intended from the outset.
KeywordsFinancial Market Abnormal Return Coverage Ratio Parent Firm Internal Capital Market
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