Value creation from equity carve-outs

Heather M. Hulburt; James A. Miles; J. Randall Woolridge

doi:10.2307/3666322

Value creation from equity carve-outs

Heather M. Hulburt, James A. Miles, J. Randall Woolridge

Research output: Contribution to journal › Article › peer-review

52 Scopus citations

Abstract

Using a large sample of equity carve-out events during the 1980s and 1990s, we find that rivals of carve-out parent firms display negative announcement-period returns. This finding distinguishes the divestiture gains hypothesis from the asymmetric information hypothesis. Additional tests provide further support for the divestiture gains hypothesis. Operating performance improvements for both parents and their carved-out subsidiaries are evident.

Original language	English (US)
Pages (from-to)	83-100
Number of pages	18
Journal	Financial Management
Volume	31
Issue number	1
DOIs	https://doi.org/10.2307/3666322
State	Published - 2002

All Science Journal Classification (ASJC) codes

Accounting
Finance
Economics and Econometrics

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10.2307/3666322

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abstract = "Using a large sample of equity carve-out events during the 1980s and 1990s, we find that rivals of carve-out parent firms display negative announcement-period returns. This finding distinguishes the divestiture gains hypothesis from the asymmetric information hypothesis. Additional tests provide further support for the divestiture gains hypothesis. Operating performance improvements for both parents and their carved-out subsidiaries are evident.",

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AB - Using a large sample of equity carve-out events during the 1980s and 1990s, we find that rivals of carve-out parent firms display negative announcement-period returns. This finding distinguishes the divestiture gains hypothesis from the asymmetric information hypothesis. Additional tests provide further support for the divestiture gains hypothesis. Operating performance improvements for both parents and their carved-out subsidiaries are evident.

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Value creation from equity carve-outs

Abstract

All Science Journal Classification (ASJC) codes

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