The Sources of Shareholders’ Wealth Gains in French Going-Private Transactions: The Role of the Largest Controlling Shareholders

2011 ◽  
Author(s):  
Sabri Boubaker ◽  
Alexis Cellier ◽  
Wael Rouatbi
Keyword(s):  
Controlling Shareholders ◽  
Going Private

The Role of Disclosure in Closing Going Private Deals.

2020 ◽  
Author(s):  
Pietro A. Bianchi ◽  
Miguel Minutti-Meza ◽  
Matthew Phillips ◽  
Maria Vulcheva
Keyword(s):  
Going Private

The SEC’s Impact on the Federalization of Corporate Governance—A Traditional Perspective

2018 ◽  
Author(s):  
Marc I. Steinberg
Keyword(s):  
Corporate Governance ◽  
Mergers And Acquisitions ◽  
Insider Trading ◽  
Securities And Exchange Commission ◽  
Outside Directors ◽  
Tender Offers ◽  
Going Private ◽  
Rule Making

This chapter examines, from a traditional perspective, several areas where the Securities and Exchange Commission (SEC) has impacted corporate governance in a meaningful way. By way of example, these subjects include insider trading, qualitative materiality, the role of gatekeepers (such as outside directors, attorneys, and accountants), the Commission’s use of disclosure to influence conduct, the implementation by subject companies of undertakings pursuant to SEC enforcement proceedings, and mergers and acquisitions (including tender offers and going-private transactions). This chapter’s focus is on the manner in which the SEC for well over 50 years has impacted corporate governance by means of exercising its rule-making and oversight authority.

The control-ownership wedge and the survival of French IPOs

2018 ◽  
Vol 19 (2) ◽  
pp. 271-294 ◽  
Author(s):  
Imen Derouiche ◽  
Syrine Sassi ◽  
Narjess Toumi
Keyword(s):  
Survival Time ◽  
Initial Public Offerings ◽  
Failure Time ◽  
Vote Rule ◽  
Agency Conflicts ◽  
Content Type ◽  
Controlling Shareholders ◽  
Public Offerings ◽  
The One

Purpose The purpose of this paper is to investigate the effect of the control-ownership wedge of controlling shareholders (excess control) on the survival of French initial public offerings (IPOs). Design/methodology/approach This paper studies a large sample of 434 French IPOs. The empirical analysis uses the Cox proportional hazard and accelerated-failure-time models. Data are manually gathered from IPO prospectuses. Findings The findings support a positive relation between the control-ownership wedge and IPO survival time, indicating that survival is more likely in firms with high excess control levels. This result is consistent with the view that controlling shareholders with a large control-ownership wedge have incentives to preserve their private benefits of control by increasing firm survival chances. The findings also show that older IPOs are more likely to survive, while riskier and underpriced IPOs are more likely to delist. Practical implications The results provide a better understanding of the role of excess control in IPO survival. They also enrich the debate on the efficiency of the one-share-one-vote rule. Originality/value The research provides new insights into the role of agency conflicts in IPO survivability. In particular, it explores the effect of dominant shareholders with a control-ownership wedge on survival time.

The Effect of Institutional Investors’ Voice on the Terms and Outcome of Freeze-out Tender Offers

2020 ◽  
Vol 10 (01) ◽  
pp. 2050002
Author(s):  
Beni Lauterbach ◽  
Yevgeny Mugerman
Keyword(s):  
Institutional Investors ◽  
Institutional Investor ◽  
The Other ◽  
Tender Offers ◽  
Controlling Shareholders ◽  
Going Private ◽  
Other Hand ◽  
The Impact ◽  
Freeze Out ◽  
Regulatory Intervention

We study the impact of institutional investors’ “voice” on 201 going private tender offers by controlling shareholders (“freeze-out” offers) in Israel. Israeli regulatory intervention in freeze-out tender offers is relatively mild; thus, institutional investors’ activism becomes crucial. We find that institutional voice has dual effects. On one hand, when there are pre-negotiations with institutional investors’ (their voice is heard), accepted offers’ premiums increase. On the other hand, when institutional investors express their voice, yet reject the offer, these rejections appear to hurt shareholders’ value. We also document significant institutional investor exit after rejected offers, especially after offers preceded by voice (pre-negotiations with institutional investors).

scholarly journals Earnings management, audit committee effectiveness and the role of blockholders ownership: Evidence from UK large firms

2012 ◽  
Vol 1 (4) ◽  
pp. 100-116 ◽  
Author(s):  
Murya Habbash
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Committee ◽  
Family Firms ◽  
Agency Problems ◽  
Audit Committees ◽  
Effective Control ◽  
Agency Conflicts ◽  
Controlling Shareholders

The existing literature documents that the quality of financial reporting is higher when firms have effective audit committees. However, recent studies find that audit committees are not effective in family firms where agency conflicts arise between controlling and non-controlling shareholders. This study extends the previous findings by investigating the effectiveness of audit committees in firms with similar agency conflicts when one owner obtains effective control of the firm. Compared to firms with a low level of block ownership, high-blockholder firms face less agency problems due to the separation of ownership and management, but more severe agency problems between controlling (blockholders) and non-controlling shareholders (minority shareholders). Using a unique hand-collected sample, this study tests the largest 350 UK firms for three years from 2005 to 2007, and shows that firms with effective audit committees have less earnings management. This study also documents that the monitoring effectiveness of audit committees is moderated in firms with high blockholder ownership. The results are not sensitive to the endogeneity test and hold for alternative specifications of both dependent and independent variables. Overall, these findings suggest that audit committees are ineffective in mitigating the majority-minority conflict compared to their effectiveness in reducing owners-managers conflicts. These conclusions, along with some recent similar evidence (e.g., Rose, 2009 and Guthrie and Sokolowsky, 2010), may raise doubts about the monitoring role of blockholders asserted by agency theorists and widely accepted in corporate governance literature.

scholarly journals Le droit des valeurs mobilières et le retour des compagnies publiques au statut de compagnie privée

2005 ◽  
Vol 20 (3) ◽  
pp. 539-582
Author(s):  
Robert Alain
Keyword(s):  
The United States ◽  
Company Law ◽  
Securities Market ◽  
Policy Statement ◽  
Full Disclosure ◽  
Going Private ◽  
Securities Law ◽  
Policy Statements ◽  
Business Purpose

This article examines the « going private » phenomenon as it has developed in the United States and Canada over the past few years as well as its implications for Quebec law. « Going private » transactions involve different means of corporate reorganization that allow a few controlling shareholders to eliminate, without adequate compensation, most other shareholders from further participation in a corporate body. Such transactions are of interest to those who study company law or securities law as the methods employed often go beyond the spirit of both. The author attempts to demonstrate the role each can play in preventing abuses of minority rights. Corporate law, while ensuring majority rule, seeks to protect individual shareholders while securities law has developed to avoid the manipulation of individual shareholders in transactions involving securities. The author believes that « going private » should take place only if full disclosure of the aims of the controlling group have been given to the minority, if there is a valid business purpose for going private and if the eliminated shareholders are treated fairly. Examples of these criteria are to be found in recent American, Canadian and Quebec jurisprudence as well as in the policy statements of the Securities Exchange Commission and the Ontario Securities Commission. These are analysed in relation to present Quebec law. The author suggests that the Quebec Securities Commission should adopt a policy statement on « going private » similar to that of the OSC. This would be a better means of ensuring that the Quebec Securities Commission fulfill its role of promoting investor protection and an efficient securities market.

The role of controlling shareholders in determining investments of intellectual capital among Taiwanese semiconductor companies

2019 ◽  
Vol 21 (1) ◽  
pp. 62-86 ◽  
Author(s):  
Chin-Hsien Hsieh ◽  
Irene Wei Kiong Ting ◽  
Jawad Asif ◽  
Hanh Thi My Le
Keyword(s):  
Intellectual Capital ◽  
Negative Relationship ◽  
Value Added ◽  
Integrated Reporting ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
Optimal Point ◽  
Content Type ◽  
Controlling Shareholders

Purpose Although intellectual capital (IC) has been proven to be value-added for companies, the drivers of IC performance remain an under-researched area. From the perspective of corporate governance, the purpose of this paper is to examine how controlling the ownership of shareholders would influence IC performance. Design/methodology/approach This study utilized value-added intellectual capital (VAICTM) and its subcomponents, namely human capital, structural capital and capital employed efficiencies, to proxy for IC performance and regression analyses to assess the association between controlling the ownership of shareholders and the IC performance of Taiwanese listed semiconductor firms for the years 2009–2017. Findings Results show that controlling the ownership of shareholders is nonlinearly related to IC performance. Specifically, controlling their ownership positively affects the level of IC performance up to an optimal point before it turns to be a negative relationship thereafter. Practical implications The results of this study can help policy makers and other stakeholders understand the role of controlling shareholders in determining IC performance. The findings of this study suggest a nonlinear relationship between controlling the ownership of shareholders and IC. Originality/value This study provides an extended perspective in studies related to the determinants of IC by considering the resources provided by controlling shareholders. The definitions of controlling interests and IC applied in this study are compared and aligned with those found in the International Financial Reporting Standard 10 – Consolidated Financial Statements and the International Integrated Reporting Council, respectively.

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