Search results

1 – 10 of over 2000
Article
Publication date: 3 May 2013

Thomas H. Thompson

The purpose of this paper is to provide a comprehensive initial evaluation of divestiture gains for reacquired carve‐out parent and subsidiary second event and three‐year…

316

Abstract

Purpose

The purpose of this paper is to provide a comprehensive initial evaluation of divestiture gains for reacquired carve‐out parent and subsidiary second event and three‐year returns for the period 1980‐2010.

Design/methodology/approach

Using several variables, we contrast reacquired carve‐out parent and subsidiary second event returns with those for acquired carve‐outs. Similarly, we contrast carve‐out parent three‐year returns.

Findings

We observe several differences between reacquired (RACO) and acquired (AQCO) carve‐outs. Indicating less competition for RACO prices, RACOs have lower market capitalization on the day before reacquisition. Supporting a certification effect for Thermo Electron, parent three‐year post reacquisition returns are positive versus negative returns for other RACO parents. Our multiple regression variables explain 27.53 percent of the subsidiary reacquisition announcement returns of 11.63 percent and explain 19.84 percent of the variation of parent three‐year returns.

Originality/value

This study makes several contributions to the literature. It is the first study to contrast the long‐term results of reacquired carve‐outs and their parents with those of acquired carve‐outs and their parents. Also, Gleason et al.’s study of reacquired carve‐outs has been extended in several ways. First, parent company three‐year returns after the reacquisition was examined. Next, returns for reacquired carve‐outs were contrasted with acquired carve‐outs. Updating Allen's study, it is reported that, except for one subsidiary acquired by a third party, all subsidiaries were reacquired by Thermo Electron.

Details

Managerial Finance, vol. 39 no. 6
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 12 February 2018

Dung Pham, Thanh Nguyen and Hari Adhikari

The purpose of this paper is to examine two different choices of corporate divestiture for US firms: selling off assets to public firms or issuing stocks in equity…

Abstract

Purpose

The purpose of this paper is to examine two different choices of corporate divestiture for US firms: selling off assets to public firms or issuing stocks in equity carve-outs. The authors identify industry-related, firm-specific, deal-related and market-timing factors that influence the choice between the two methods of divestiture.

Design/methodology/approach

The authors use the univariate tests, logistic regressions and buy-and-hold excess return computations to identify industry-related, firm-specific, deal-related and market-timing factors that influence the choice between the two methods of divestiture.

Findings

The results show that industry concentration, relative “hotness” of the equity carve-out market, market values of divested units and firm’s growth opportunities are all positively related to the probability of an equity carve-out selection. In contrast, firms in financial service industry, firms that divest smaller units and firms with higher asymmetric information mainly choose to divest assets through asset sell-offs. The findings also indicate that firms with higher leverage and/or higher cash flow constraint show a stronger likelihood for choosing either the equity carve-out option or asset sell-off with cash payment over asset sell-off with stock payment. In the long run, firms that sell-off their assets experienced better performance relative to firms that choose to carve-out.

Research limitations/implications

The authors recognize several limitations of this study. First, the findings use the data collected in the US market. These findings may not be necessarily true to non-US firms. Therefore, one possible extension of this paper is to further examine the determinants that drive the methods of divestiture for non-US firms. Second, the authors have not examined the association between the choices of divestiture and the subsequent long-term operating performance of the firms. This could be another interesting direction for research in the future.

Practical implications

The findings have some implication for the divestiture literature by providing a set of determinants which play important roles on firms’ choice between an asset sell-off and an equity carve-out. The findings also have important implications for a potential acquirer who is interested in buying a firm’s subsidiary. Specifically, by analyzing the aforementioned influencing factors, the acquirer might foresee the possibility of a carve-out method and plan its bidding offer accordingly. From investors’ perspective, knowing which factors affect firms’ divesting methods and their subsequent long-run stock performance is undoubtedly beneficial to their investment strategies.

Originality/value

Prior research has attempted to address the reasons why firms divest or the outcomes of those actions. This paper focuses on the factors that influence the choice of sell-off versus carve-out once the decision to divest has been made. In addition, the authors look at a wide range of factors including industry-related, firm-specific, deal-related and market timing.

Details

Review of Accounting and Finance, vol. 17 no. 1
Type: Research Article
ISSN: 1475-7702

Keywords

Article
Publication date: 30 August 2011

Thomas H. Thompson

The purpose of this paper is to provide a comprehensive initial evaluation of the changing issuer objective and partial price adjustment hypotheses as applied to carve‐out

Abstract

Purpose

The purpose of this paper is to provide a comprehensive initial evaluation of the changing issuer objective and partial price adjustment hypotheses as applied to carve‐out parent initial and three‐year returns for the period 1988‐2006.

Design/methodology/approach

Using five primary variables: the percentage of the subsidiary retained by the parent, the ratio of offering size to parent market capitalization, filing range adjustments, the percentage of the offering used to retire subsidiary debt or to pay dividends, and the CBOE volatility index to predict initial and three‐year returns, the paper shows that ex ante variables can predict carve‐out parent initial and three‐year returns.

Findings

The paper shows that public information known prior to the offer date influences 7.52 percent of the variation in announcement, 5.57‐38.31 percent of the variation in ex‐date and 6 percent of the variation in three‐year market‐adjusted equity carve‐out parent returns.

Originality/value

This study makes several contributions to the literature. Although prior studies focus on ex post determinants of equity carve‐out returns, this study is the first to explore ex ante predictors of equity carve‐out parent returns. The implications of these results are that publicly available information known prior to the carve‐out offering date can influence market‐adjusted initial and three‐year parent carve‐out returns and can explain 6‐17 percent of the variation.

Details

Managerial Finance, vol. 37 no. 10
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 19 January 2010

Thomas H. Thompson and Vince Apilado

The purpose of this paper is to provide a comprehensive initial evaluation of the wealth transfer hypothesis as applied to the second‐stage events and announcements that…

Abstract

Purpose

The purpose of this paper is to provide a comprehensive initial evaluation of the wealth transfer hypothesis as applied to the second‐stage events and announcements that follow carve‐outs during the period from 1983 to 2004.

Design/methodology/approach

Using daily security prices, such combinations are shown to have multi‐faceted wealth transfers and wealth creation.

Findings

In contrast with the wealth losses found in previous studies, wealth increases are observed for parent stockholders and bondholders in the spin‐off announcement and event phases for combination carve‐outs and spin‐offs. Also, the spin‐off is the most prevalent second divestiture choice for parents with traded debt.

Originality/value

This study makes several contributions to the literature. First, in contrast with recent wealth transfer studies that use monthly bond returns, daily stock and bond returns are used to examine the wealth effect for parent stockholders and bondholders during the announcement and ex‐dates of second‐stage events. Second, in contrast with previous studies that found a wealth transfer from bondholders to stockholders in the spin‐off phase, statistically significant wealth retention was observed for bondholders and for stockholders at spin‐off and other second event announcements. Third, the results reflect that increased collateral from the carve‐out phase lessens the potential for bondholder wealth loss in the spin‐off phase.

Details

Managerial Finance, vol. 36 no. 2
Type: Research Article
ISSN: 0307-4358

Keywords

Book part
Publication date: 21 October 2008

Ashley A. Dunham, Teresa L. Scheid and William P. Brandon

This chapter explores how primary care physicians deliver mental health treatment for Medicaid patients in one county in the United States, and how treatment may have…

Abstract

This chapter explores how primary care physicians deliver mental health treatment for Medicaid patients in one county in the United States, and how treatment may have changed after HMO enrollment with a mental health carve-out. We utilize Lipsky's theory of street-level bureaucracy to better understand how primary care physicians treat Medicaid patients for depression and what types of insurance arrangements support or inhibit that treatment. Exploratory interviews with 20 physicians revealed that the patient's status as a non-voluntary client, service system barriers and physicians’ commitment to treatment caused them to bear primary responsibility for the majority of depression care. Physicians were willing to act as advocates for their clients and viewed such advocacy as ethical given the lack of mental health parity. In general, primary care physicians were not familiar with new policies dictating mental health carve-outs for Medicaid patients, nor were they concerned with how mental health care was reimbursed for their patients. However, they were willing to provide mental health care even if they were not reimbursed. Physicians rely upon medication management to treat depression, and reimbursement plays a role in the amount of time spent with patients and in the coding used for the visit. Lipsky's (1980) theory of street-level bureaucracy provides a useful framework for understanding how physicians will act as advocates for their clients in the face of structural as well as resource constraints on health care.

Details

Care for Major Health Problems and Population Health Concerns: Impacts on Patients, Providers and Policy
Type: Book
ISBN: 978-1-84855-160-2

Content available
Article
Publication date: 13 November 2007

51

Abstract

Details

Pigment & Resin Technology, vol. 36 no. 6
Type: Research Article
ISSN: 0369-9420

Book part
Publication date: 21 October 2019

Xavier Fageda, Ricardo Flores-Fillol and Bernd Theilen

This study investigates, both theoretically and empirically, the effects of joint ventures on traffic. Although alliances are a pre-condition for joint ventures, both…

Abstract

This study investigates, both theoretically and empirically, the effects of joint ventures on traffic. Although alliances are a pre-condition for joint ventures, both cooperation agreements are different in their nature. The reason is that alliances are revenue-sharing agreements, whereas joint ventures also involve a cost-sharing commitment. Our empirical analysis focuses on the transatlantic market, including non-stop routings (interhub markets) and one-stopover routings (interline markets). Our theoretical and empirical findings emphasize the relevance of economies of traffic density and reveal a positive effect of joint ventures on traffic, both in interhub and interline markets.

Book part
Publication date: 28 August 2018

Katrice Albert, Michael Goh and Virajita Singh

“Valleys” make for interesting analogies. They are geological depressions that can reflect the struggles and lows sometimes experienced with equity and diversity work…

Abstract

“Valleys” make for interesting analogies. They are geological depressions that can reflect the struggles and lows sometimes experienced with equity and diversity work. Carved out by ancient glaciers, valleys lend themselves to critical comparisons to the glacial pace that frequently characterizes the change in higher education. But when tagged with the noun “hope,” glaciers represent the work of carving out new forms, shapes, avenues, and their amazing transformative power to change landscapes. The aspiration and desire for change, the wish for something better, and acting intelligently and intentionally on ambitious equity and diversity goals make “Valleys of Hope” an apt analogy of the higher education landscape that describes the University of Minnesota’s equity and diversity journey and successes. Carpe Diem, a Latin phrase frequently translated to mean “seize the day,” is in our chapter title because we felt it appropriately conveyed how two consecutive equity and diversity leaders harnessed the zeitgeist of campus strategic initiatives to rally their campus communities around equity and diversity imperatives. Carpe Diem sometimes connotes a focus on the present versus the future. Yet, in our view visions and initiatives anchored in core values have in fact a surprising omnipresence and permanence over time. We share two leadership “acts” with readers in this chapter.

Book part
Publication date: 16 August 2014

Robert A. Miller

While scholars discuss the theory of “Business Ethics,” students grapple with applying those theories to hypothetical case studies and business people struggle to live…

Abstract

Purpose

While scholars discuss the theory of “Business Ethics,” students grapple with applying those theories to hypothetical case studies and business people struggle to live business ethics in practice. Many fail, casting large and ominous shadows. We are inundated with their stories. We need to hear more often stories of those who have succeeded and why their examples are important to the field of Business Ethics.

Design/methodology/approach

This chapter, after providing a brief overview of the differing uses of the term, Business Ethics, expands upon the metaphor of “ethical space” as the eye of a moral hurricane, provides diagrams illustrating the formation of ethical space in a business behavioral context, applies those diagrams to the examples of Andersen and Feuerstein as moral exemplars, discusses ways to mitigate the shadows that eclipsed their example, and suggests ways to enlarge corporate ethical space.

Findings

Ethics is a habit learned through mentoring and developed through practice. In a world of conflicting influences, we each carve out our own ethical space that can serve as an example to others as they face their own individual ethical challenges, but at the corporate level, a moral exemplar will inform the larger corporate ethical space only when the leadership of the corporation consciously adopts and constantly reinforces the example of its moral exemplar.

Originality/value

This chapter uses the visual metaphor of the eye of a hurricane to discuss the formation and importance of ethical space to moral exemplars in a world of conflicting influences and moral pressures.

Details

Moral Saints and Moral Exemplars
Type: Book
ISBN: 978-1-78350-075-8

Keywords

Article
Publication date: 11 March 2021

Anthony Nkrumah Agyabeng

The study aimed at examining the regional reorganization and its implications on socio-economic development on the people of Oti region, Ghana.

Abstract

Purpose

The study aimed at examining the regional reorganization and its implications on socio-economic development on the people of Oti region, Ghana.

Design/methodology/approach

The study utilized both textual data and in-depth interviews in context. Purposive and convenience sampling techniques were used to select 35 participants from the Oti Region.

Findings

The study found some critical services, and public goods have been provided and established in Oti Region since its establishment. Furthermore, it was established that residents have mixed reactions in terms of their expectations of the establishment of the new region on their livelihoods.

Research limitations/implications

The conclusion and the outcome of this study cannot be generalized as a representation of the whole population of Oti Region due to a qualitative approach.

Practical implications

This study discovered country- and community-specific understanding, expectations and elucidations of socio-economic development.

Originality/value

The outcome of the study has expanded and further advanced the sparse literature in the domain, which could help politician and policymakers in future, policy direction and further help to ignite scholars' interest in the field in future

Details

International Journal of Public Leadership, vol. 18 no. 1
Type: Research Article
ISSN: 2056-4929

Keywords

1 – 10 of over 2000