Ulteriori informazioni
Equity carveouts (ECOs) as an instrument of financing and reorganization have increased in popularity: In 1999/2000, more than 40% of German IPO volume is accounted for by equity carveouts. Prominent examples are the carveout of Infineon (Siemens) and of T-Online (Deutsche Telekom). However, activity has decreased since the boom year 2000, and in 2002 and 2003 not a single ECO has taken place. In 2004, the planned ECO of Hapag-Lloyd was cancelled, and Deutsche Telekom even bought back T-Online. Thus, in practice there is no clear verdict on ECOs as instruments of financing and reorganization. The academic literature has been occupied with the subject for 15 to 20 years, but with heterogeneous results: Some contributions lack stringent theoretical foundations, coupled with effective empirical analysis, others limit their scope to the short-term effect of ECOs. Consequently, the overall effect of ECOs on firm valuation still remains unclear. The present thesis by Lukas Junker attempts to answer exactly this question. It analyzes the effects of ECOs on firm valuation (holding company as well as subsidiary).
Sommario
1 Introduction.- 1.1 Problem statement.- 1.2 Definitions.- 1.3 Motivation: The special interest in ECOs.- 1.4 Existing ECU research.- 1.5 Objective.- 1.6 Outline.- 2 Theoretical Foundations.- 2.1 Section outline.- 2.2 Theoretical foundations of corporate finance.- 2.3 Agency theory and its implications.- 2.4 Application of agency theory to empirical corporate finance.- 2.5 A two-dimensional agency framework for the analysis of ECOs.- 3 Hypothesis development.- 3.1 Section outline.- 3.2 Development of value levers.- 3.3 Lever 1: Focus and investment efficiency.- 3.4 Lever 2: Information asymmetries and disclosure.- 3.5 Lever 3: Incentive compensation.- 3.6 Lever 4: Ownership concentration.- 3.7 Summary of hypotheses.- 4 Empirical Evidence.- 4.1 Section Outline.- 4.2 Data.- 4.3 Methodology.- 4.4 Results.- 4.5 Discussion.- 5 Conclusion.- 6 References.
Info autore
Dr. Lukas Junker promovierte bei Prof. Dr. Malte Brettel am Lehrstuhl für Wirtschaftswissenschaften für Ingenieure und Naturwissenschaftler der Rheinisch-Westfälischen Technischen Hochschule Aachen. Er ist als Unternehmensberater im Sektor Financial Institutions bei einem großen Beratungsunternehmen in Frankfurt am Main tätig.
Riassunto
Equity Carveouts (ECOs), the initial public offering of shares in a subsidiary of a group of companies, are a relatively frequent phenomenon on the German capital market. The success of such prominent transactions as the carveout of Infineon or T-Online has been controversially discussed in both practice and academia.
Lukas Junker examines if ECOs lead to a sustainable, long-term increase in firm value. His analysis is based on an agency perspective and ECOs are understood as an instrument of financing and reorganization that leads to a reconfiguration of the incentive structure in the groups of companies. In contrast to the dominantly positive assessment, results show that on the German capital market and on a long-term basis ECOs are associated with a deterioration of firm value. This can be mainly explained by a lack of independence of the subsidiary in the typical transaction: The reorganization is not beneficial, since most subsidiaries effectively remain part of the groups of companies with the holding company retaining a majority interest.
