Stabsseminar ved Mattias Nilsson

Dr. Mattias Nilsson, Handelshögskolan i Stockholm, holder stabsseminar ved Institutt for foretaksøkonomi fredag 9. mars.

07.03.2001 - Elin F. Styve

Tema er The Choice Between Rights Offerings and Private Equity Placements

Tid og sted:
Fredag 9. mars kl. 1215-1330 i Karl Borchs aud.

Abstract
We investigate the choice between rights offerings and private equity placements, using almost the entire population of rights offerings and private placements conducted by listed Swedish firms over the period 1986-1997. We find that firms with a higher degree of asymmetric information about firm value are more likely to choose a private placement, in particular if there is uncertainty about the value of a new investment opportunity. There is also a significant positive association between the choice of a private placement and the establishment of a strategic alliance, joint venture, or another product market relationship concurrent with the issue. We report positive average stock market reactions at the announcements of both issue types, but that the valuation effect is significantly larger for firms announcing a private placement than for firms announcing a rights issue. Furthermore, private placement firms increase their operating performance after the issue, whereas rights issue firms do not. The evidence is consistent with firms choosing private placements to overcome underinvestment problems and to reduce contracting costs in product market relationships.

Paper kan hentes fra instituttets hjemmeside: www.nhh.no/for/seminars/2001-spring/090301.pdf.

Kontaktperson:
Iver Bragelien (9599)