Seasoned equity issues in a closely held market: evidence from France
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.
|Date of creation:||2002|
|Publication status:||Published in European Finance Review, 2002, 6 (3), pp.291-319. <10.1023/A:1022024925877>|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00138293|
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