IDEAS home Printed from https://ideas.repec.org/p/ysm/somwrk/ysm67.html
   My bibliography  Save this paper

Rearranging Residual Claims: A Case for Targeted Stock

Author

Listed:
  • James K. Seward

    () (School of Business)

  • Dennis E. Logue

    () (Michael F. Price College of Business)

  • James P. Walsh

    () (Business School)

Abstract

This paper describes and analyzes a relatively new method of equity-based restructuring, Targeted Stock. We examine announcement period share price reactions for completed, pending, and canceled offerings. Although the total number of completed transactions to date is small, we document a positive share price reaction on average for this form of equity reorganization. We then compare and contrast Targeted Stock with alternative equity reorganization forms, including spin-offs, equity carve-outs, and dual class common stock. We argue that Targeted Stock is most useful for firms in which the benefits of integration and control over corporate operating and financing activities outweigh the benefits of a complete or partial separation of the targeted business unit(s).

Suggested Citation

  • James K. Seward & Dennis E. Logue & James P. Walsh, 1998. "Rearranging Residual Claims: A Case for Targeted Stock," Yale School of Management Working Papers ysm67, Yale School of Management.
  • Handle: RePEc:ysm:somwrk:ysm67
    as

    Download full text from publisher

    File URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=10051
    Download Restriction: no

    More about this item

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ysm:somwrk:ysm67. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/smyalus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.