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The Strategy of Going Public: How UK Firms Choose Their Listing Contracts

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  • Marc Goergen
  • Arif Khurshed
  • Ram Mudambi

Abstract

UK firms going public have a choice between public offers and placings. This choice has important implications in terms of who bears the risk of the issue failing and of its costs. We find that firms with higher "ex ante" uncertainty choose a placing contract. Highly reputable sponsors and creditor screening serve as signals of firm quality, enabling such firms to choose a public offer. Large and multinational firms usually choose a public offer whereas there is some evidence that very small issues choose a placing. Finally, the 'hotness' of the IPO market increases the probability of placings. Copyright Blackwell Publishers Ltd, 2006.

Suggested Citation

  • Marc Goergen & Arif Khurshed & Ram Mudambi, 2006. "The Strategy of Going Public: How UK Firms Choose Their Listing Contracts," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(1-2), pages 79-101.
  • Handle: RePEc:bla:jbfnac:v:33:y:2006-01:i:1-2:p:79-101
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    References listed on IDEAS

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    1. Jenkinson, Tim & Ljungqvist, Alexander, 2001. "Going Public: The Theory and Evidence on How Companies Raise Equity Finance," OUP Catalogue, Oxford University Press, edition 2, number 9780198295990.
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    1. repec:eee:corfin:v:49:y:2018:i:c:p:1-14 is not listed on IDEAS
    2. Adjasi, Charles K.D. & Osei, Kofi A. & Fiawoyife, Eme U., 2011. "Explaining underpricing of IPOs in frontier markets: Evidence from the Nigeria Stock Exchange," Research in International Business and Finance, Elsevier, vol. 25(3), pages 255-265, September.
    3. Jirapun Chorruk & Andrew Worthington, 2010. "Firm-specific determinants and outcomes of initial public offerings in Thailand, 2001รข 2007," Discussion Papers in Finance finance:201002, Griffith University, Department of Accounting, Finance and Economics.
    4. Zhang, Cinder Xinde & King, Tao-Hsien Dolly, 2010. "The decision to list abroad: The case of ADRs and foreign IPOs by Chinese companies," Journal of Multinational Financial Management, Elsevier, vol. 20(1), pages 71-92, February.

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