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


Author Info

  • Edith Ginglinger

    (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris Dauphine - Paris IX)

  • Jean-François Gajewski


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.

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Bibliographic Info

Paper provided by HAL in its series Post-Print with number halshs-00138293.

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Date of creation: 2002
Date of revision:
Publication status: Published, European Finance Review, 2002, 6, 3, 291-319
Handle: RePEc:hal:journl:halshs-00138293

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Related research

Keywords: seasoned equity issues; flotation methods; ownership structure.;


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Cited by:
  1. Ginglinger, Edith & Koenig-Matsoukis, Laure & Riva, Fabrice, 2013. "Seasoned equity offerings: Stock market liquidity and the rights offer paradox," Economics Papers from University Paris Dauphine 123456789/10852, Paris Dauphine University.
  2. Lasfer, Meziane & Gajewski, Jean-François & Ginglinger, Edith, 2007. "Why do companies include warrants in seasoned equity offerings?," Economics Papers from University Paris Dauphine 123456789/966, Paris Dauphine University.
  3. Polwat Lerskullawat, 2013. "Warrant Seos in an Emerging Market: Evidence from Thailand," Diversity, Technology, and Innovation for Operational Competitiveness: Proceedings of the 2013 International Conference on Technology Innovation and Industrial Management, ToKnowPress.
  4. Bozos, Konstantinos & Nikolopoulos, Konstantinos, 2011. "Forecasting the value effect of seasoned equity offering announcements," European Journal of Operational Research, Elsevier, vol. 214(2), pages 418-427, October.
  5. Mohamed Faker Klibi & Hamadi Matoussi, 2007. "Gestion Des Resultats Et Performance Comptable Et Boursiere Des Entreprises Émettrices De Nouvelles Actions," Post-Print halshs-00534752, HAL.
  6. Malhotra, Madhuri Malhotra & M., Thenmozhi & Gopalaswamy, Arun Kumar, 2012. "Liquidity changes around bonus and rights issue announcements: Evidence from manufacturing and service sectors in India," MPRA Paper 41216, University Library of Munich, Germany.
  7. Errunza, Vihang R. & Miller, Darius P., 2003. "Valuation effects of seasoned global equity offerings," Journal of Banking & Finance, Elsevier, vol. 27(9), pages 1611-1623, September.
  8. Riva, Fabrice & Ginglinger, Edith & Koenig-Matsoukis, Laure, 2009. "Stock market liquidity and the rights offer paradox," Economics Papers from University Paris Dauphine 123456789/3035, Paris Dauphine University.
  9. Suchard, Jo-Ann & Singh, Manohar, 2006. "The determinants of the hybrid security issuance decision for Australian firms," Pacific-Basin Finance Journal, Elsevier, vol. 14(3), pages 269-290, June.
  10. Massimo Massa & Theo Vermaelen & Moqi Xu, 2013. "Rights offerings, trading, and regulation: a global perspective," LSE Research Online Documents on Economics 55403, London School of Economics and Political Science, LSE Library.
  11. Koenig-Matsoukis, Laure & Riva, Fabrice & Ginglinger, Edith, 2009. "Stock market liquidity and the rights offer paradox," Economics Papers from University Paris Dauphine 123456789/2939, Paris Dauphine University.
  12. Kabir, Rezaul & Roosenboom, Peter, 2003. "Can the stock market anticipate future operating performance? Evidence from equity rights issues," Journal of Corporate Finance, Elsevier, vol. 9(1), pages 93-113, January.
  13. Kabir, Rezaul, 2003. "Corporate Financing in The Netherlands: Some Empirical Evidence," EIFC - Technology and Finance Working Papers 32, United Nations University, Institute for New Technologies.
  14. Lasfer, Meziane & Ginglinger, Edith & Gajewski, Jean-François, 2005. "Why do Companies Include Warrants in Seasoned Equity Offerings: The case of French Unit Offerings," Economics Papers from University Paris Dauphine 123456789/2917, Paris Dauphine University.
  15. Hatem Mansali, 2009. "La gestion des résultats et les performances comptables à long terme des entreprises françaises émettrices d’actions," Revue Finance Contrôle Stratégie,, vol. 12(4), pages 39-83, December.
  16. Koenig-Matsoukis, Laure, 2010. "Financial intermediation and the rights offer paradox," Economics Papers from University Paris Dauphine 123456789/4430, Paris Dauphine University.
  17. Adaoglu, Cahit, 2006. "Market reaction to "unsweetened" and "sweetened" rights offerings in an emerging European stock market," Journal of Multinational Financial Management, Elsevier, vol. 16(3), pages 249-268, July.
  18. Suchard, Jo-Ann, 2005. "The use of stand alone warrants as unique capital raising instruments," Journal of Banking & Finance, Elsevier, vol. 29(5), pages 1095-1112, May.


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