Unseasoned equity offerings MBO-IPOs vs NON-MBO-IPOs

Saadouni, B. S., Briston, R. J. and Mallin, C. A. (1996) Unseasoned equity offerings MBO-IPOs vs NON-MBO-IPOs. Journal of Business Finance & Accounting, 23 (1). pp. 47-61. ISSN 0306-686X

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In this paper we examine the degree of under-pricing of two different types of unseasoned equity offerings (IPOs), namely MBO-IPOs and non-MBO-IPOs. Since, MBO-IPOs were previously subsidiaries or divisions of publicly listed companies which were taken private by a group of managers and then reverted back to public ownership; there should be a lower level of information asymmetry between the market on the one hand and the company and its underwriters on the other. Thus, if under-pricing is mainly the result of uncertainty about the market value of the issuing firm, the information asymmetry hypothesis would predict that, compared with the non-MBO-IPOs, MBO-IPOs should exhibit a significantly lower degree of under-pricing. The results show that MBO-IPOs are less under-priced than non-MBO-IPOs. However, the difference is not statistically significant.

Item Type: Article
Faculty \ School: Faculty of Social Sciences > Norwich Business School
UEA Research Groups: Faculty of Social Sciences > Research Groups > Accounting, Finance and Governance (former - to 2017)
Depositing User: Elle Green
Date Deposited: 07 Sep 2012 14:38
Last Modified: 15 Dec 2022 02:05
URI: https://ueaeprints.uea.ac.uk/id/eprint/39490
DOI: 10.1111/j.1468-5957.1996.tb00401.x

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