P. Andrikopoulos
Ownership Structure and the Choice of SEO Issue Method in the UK
Andrikopoulos, P.; Sun, J.; Guo, M.
Abstract
Purpose This study analyses the role of ownership characteristics in a firm’s choice of alternative seasoned equity offering methods, offer price discounts and market reactions to such announcements within the UK setting. Design/methodology/approach Our study examines 697 seasoned equity offerings events of firms traded in the UK during the period 1998 to 2012 using multivariate and binomial logistic regression models. Ordinary least square models are also used to examine how ownership variables affect offer price discounts and stock market performance during the announcement of such corporate events. Findings We show that placings and open offers are the preferred methods for issuing equity by firms with higher managerial ownership. Thus, our evidence strongly supports the prediction of the entrenched management hypothesis. Moreover, the probability of choosing a combination of placings and open offers is also found to be significantly related to issue size, offer discount, leverage and previous stock performance. Our results show that pre-issue market conditions have a significant effect on the choice of issue method with rights offers and the combination of placings and open offers primarily utilised by firms for issuing equity during hot market periods. Originality/value Unlike prior seasoned equity offerings’ studies in the UK that predominantly concentrate on the use of rights offers and placings, this study examines, for the first time, the link between open offers and the combination of placings and open offers with ownership concentration. We also investigate how offer price discounts are related to the firms’ ownership structure, various company micro-characteristics and the wider market conditions.
Citation
Andrikopoulos, P., Sun, J., & Guo, M. (2017). Ownership Structure and the Choice of SEO Issue Method in the UK. International Journal of Managerial Finance, 13(4), 378-396. https://doi.org/10.1108/ijmf-04-2017-0069
Journal Article Type | Article |
---|---|
Acceptance Date | Apr 6, 2017 |
Online Publication Date | Jun 19, 2017 |
Publication Date | Aug 7, 2017 |
Deposit Date | Apr 11, 2017 |
Publicly Available Date | Apr 13, 2017 |
Journal | International Journal of Managerial Finance |
Print ISSN | 1743-9132 |
Publisher | Emerald |
Peer Reviewed | Peer Reviewed |
Volume | 13 |
Issue | 4 |
Pages | 378-396 |
DOI | https://doi.org/10.1108/ijmf-04-2017-0069 |
Public URL | https://durham-repository.worktribe.com/output/1360760 |
Files
Accepted Journal Article
(898 Kb)
PDF
Copyright Statement
This article is © Emerald Group Publishing and permission has been granted for this version to appear here http://dro.dur.ac.uk/21519/. Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited.
You might also like
Institutional ownership and corporate greenhouse gas emissions: The evidence from China
(2023)
Journal Article
Does corporate ESG create value? New evidence from M&As in China
(2022)
Journal Article
What Drives Individual Investors in the Bear Market?
(2022)
Journal Article
The Logic of Control Arrangement of Acting-in-Concert Agreements
(2021)
Journal Article
Downloadable Citations
About Durham Research Online (DRO)
Administrator e-mail: dro.admin@durham.ac.uk
This application uses the following open-source libraries:
SheetJS Community Edition
Apache License Version 2.0 (http://www.apache.org/licenses/)
PDF.js
Apache License Version 2.0 (http://www.apache.org/licenses/)
Font Awesome
SIL OFL 1.1 (http://scripts.sil.org/OFL)
MIT License (http://opensource.org/licenses/mit-license.html)
CC BY 3.0 ( http://creativecommons.org/licenses/by/3.0/)
Powered by Worktribe © 2025
Advanced Search