Seasoned equity issues in a closely held market: evidence from France

Jean-François Gajewski () and Edith Ginglinger
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Jean-François Gajewski: IRG - Institut de Recherche en Gestion - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12

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Abstract: This paper examines seasoned equity offerings in France. Even though a rightsoffering is the primary flotation method, French companies are increasingly using therelatively expensive public offering method. We show that the market reaction to theannouncement of seasoned equity issues is significantly negative for rights issues andinsignificantly negative for public offerings. Our results suggest that the adverseselection effect is greater for rights issues than for public offerings, due to strongerunderwriter certification for the public offerings. We find that the share price effect ispositively related to blockholders take-up renouncements for firms with priorconcentrated ownership. For these firms, the favourable ownership dispersion effectoffsets the adverse selection effect.

Keywords: ownership structure.; flotation methods; seasoned equity issues; ownership structure (search for similar items in EconPapers)
Date: 2002
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00138293v1
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Published in Review of Finance, 2002, 6 (3), pp.291-319. ⟨10.1023/A:1022024925877⟩

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Journal Article: Seasoned Equity Issues in a Closely Held Market: Evidence from France (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00138293

DOI: 10.1023/A:1022024925877

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