An examination of the impact of equity carve-outs on stockholder and bondholder wealth

Thomas H. Thompson and Vince Apilado

Journal of Economics and Business, 2009, vol. 61, issue 5, 376-391

Abstract: This study provides a comprehensive initial evaluation of the wealth transfer hypothesis as applied to the carve-out announcement and partial IPO on stockholders and bondholders from 1983 to 2002. Using daily security prices we show that such combinations have multi-faceted wealth transfers and wealth creation. Consistent with existing theory, we observe a wealth increase for stockholders and bondholders in the carve-out announcement period. In the carve-out period, we report a wealth loss for parent stockholders and bondholders, but a gain for subsidiary stockholders.

Keywords: Carve-outs; Wealth; transfer (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:61:y::i:5:p:376-391

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