| Author: | Ali, K. Ramirez, G. G. Yung, K. K. |
| Title: | Withdrawn Spin-Offs: An Empirical Analysis |
| Journal: | Journal of Financial Research
2001 : WINTER, VOL. 24:4, p. 603-616 |
| Index terms: | EMPIRICAL RESEARCH ANALYTICAL REVIEW FINANCE FINANCING MARKET THEORY MARKET CONDITIONS |
| Language: | eng |
| Abstract: | The authors examine market reaction to corporate spin- offs that are eventually withdrawn. These spin-offs do not experience the significant positive share price response reported for spin-offs generally. The overall market reaction to both the initial spin-off announcement and the withdrawal announcement is not significant. When a reason is provided for withdrawing a spin-off, there is a significant positive market reaction; otherwise, there is a significant negative reaction. Firms that withdraw a spin- off without stating a reason experience significant deterioration in industry-adjusted operating performance in the three years following the withdrawal. These results indicate the market can anticipate the viability of withdrawn spin-offs at the time of the initial announcement. |
SCIMA