The Choice between Spin-offs and Sell-offs

Terry Nixon, Rodney L Roenfeldt and Neil W Sicherman

Review of Quantitative Finance and Accounting, 2000, vol. 14, issue 3, 277-88

Abstract: Spin-offs and sell-offs are alternative methods for divesting assets, but the effects on the parent firm differ substantially. We examine firms' characteristics that may influence the asset divestiture choice between a spin-off and sell-off. Results of the analysis indicate that the primary factors influencing the choice of divestiture type are financial distress, number of directors on the board, whether the CEO is also the Board Chair, and the size of the unit divested. Copyright 2000 by Kluwer Academic Publishers

Date: 2000
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