none

This thesis investigates the share price response to the announcement of private placements of hybrid securities in Australia. Firstly, the size and direction of the share price response is examined. Secondly, the determinants of the share price response are examined. Where possible, comparisons are made to evidence from international markets. The sample of data tested consists of 43 announcements of convertible debt issues, 39 announcements of preference share issues and 19 announcements of option issues made between 1983 and 2000 by Australian firms. The analysis of the share price impact in response to the announcements is conducted using Maynes and Rumsey (1993) event study methodology that adjusts for thin trading. The determinants of the share price response are examined using model specifications that are derived from the theoretical literature. The analysis of the announcement effect of private placements of hybrid securities finds significant negative abnormal returns for convertible debt issues, insignificant negative abnormal returns for preference share issues and significant positive abnormal returns for option issues. In comparison to international studies, the convertible debt results are similar to public and rights issues, the insignificant preference share results are similar to other findings and the option results are similar to private placements of equity and rights issues of options. The results of the investigation of the determinants of the announcement effect of private placements of hybrid securities finds that convertible debt issues are best explained by information asymmetry - firm and issue characteristics, the information asymmetry - external monitors hypothesis, the information asymmetry - dynamic hypothesis and the agency cost hypothesis. The impact of preference share issues is best explained by information asymmetry - firm and issue characteristics, the information asymmetry - external monitors hypothesis, the agency cost hypothesis and the price pressure hypothesis. The announcement effect of option issues is best explained by information asymmetry - firm and issue characteristics, the information asymmetry -dynamic hypothesis and the optimal capital structure hypothesis.

民國90年代初期，我國參照美、日私募之規定，正式引進私募制度。此後，企業得以選擇公開現金增資，或透過私募發行新股，來募集所需的營運資金。根據統計，民國94年以後，台灣的私募市場日趨成熟，私募逐漸成為企業最重要的籌資管道之一，特別是讓原先不能符合公開募集資格之公司，合法迅速取得資金。雖然私募之平均發行金額仍小於公開現金增資，但近年來私募件數平均都有超越公開現金增資之表現，顯示私募在資本募集市場的重要角色，也肯定其對於企業和經濟發展之正面功效。 過去文獻指出，美國之私募平均以折價發行，且有顯著正的宣告股價效果。針對不同樣本之特性，Wruck（1989）、Hertzel and Smith（1993）和Barclay, Holderness and Sheehan（2007）分別提出監督假說（monitoring hypothesis）、資訊不對稱假說（information asymmetry hypothesis）和自利假說（entrenchment hypothesis）解釋之。雖然我國之私募制度多參照美國而訂定，但法律架構和私募流程仍有相當程度的差異。因此，本研究將以上述三大假說為基礎，藉由樣本敘述統計和線性迴歸分析，探討我國上市上櫃公司私募之定價與宣告股價效果。 我們自公開資訊觀測站收集民國91年至98年7月底之私募股權樣本，扣除變數資料不全者，最後共有398筆，包含上市公司174筆，上櫃公司224筆。研究發現，我國私募多以折價發行。其中，特別股之折價幅度低於普通股，電子科技類普通股之折價幅度又高於普通股之平均。而且，根據迴歸結果，私募金額、私募比率和公司規模三個變數最能解釋我國私募之折溢價幅度，但並沒有傾向支持任一個私募假說。 至於宣告股價效果，我國私募董事會和股東會皆不顯著為正，且宣告股價效果的迴歸解釋力也偏低，只有股價淨值較具顯著性。探究其原因，可能是因為我國私募制度不同所致。依證交法之規定，私募股權需先經由董事會和股東會同意後，始得募集。然而，最後私募成功與否常與市況和發行公司能否找到適當投資人等密切相關。既然兩事件日都不能保證私募可以如期完成，我們也就無法預期投資人會對私募有明確迅速的反應。 / In the beginning of 2000, Taiwan’s Securities Transaction Law was amended to introduce the new way of financing- private placements. Since then public corporations are allowed to issue new securities either by public offerings and private placements. According to statistics, after 2005 private placements have become one of the most important funding sources for corporations, especially for those who are disqualified for public offerings. Although the average proceed of private placements is still relatively small, the number of private placements has already surpassed that of public offerings in recent years. This manifests the important role of private placements in building a sound financial market. Private placements in the U.S., despite selling at discounts, are associated with significant positive abnormal returns on the announcement date. With different sample characteristics, Wruck (1989), Hertzel and Smith (1993) and Barclay, Holderness and Sheehan (2007) suggest monitoring hypothesis, information asymmetry hypothesis and entrenchment hypothesis respectively. Our study is based with these three most accepted hypotheses and aims to give an insight in Taiwan’s private placement of equities for public corporations. I search the Market Observation Post System for all private placements from 2002 to July of 2009, and obtain a sample of 398 private equities with complete data. Empirical evidence shows that Taiwan’s private equities are selling at discounts as well and “proceeds of private equity”, “placement fraction” and “corporate size” are the three significant explanatory variables for discounts. However, all the results seem not to fully support any hypothesis as mentioned above. On the other hand, the announcement stock price effects on the board and shareholders’ meeting are insignificantly positive in Taiwan. The regressions on the announcement stock price returns also indicate low explanatory power with only “Tobin’s Q” variable being significant overall. This may be attributed to the legislation differences between U.S. and Taiwan. According to Taiwan’s Securities Transaction Law, private equities should be first approved by the board and shareholders’ meeting, but might not be a successful private equity placement due to market condition, lack of proper investors and others. As a result, we can’t expect investors would instantly, correctly respond to this resolution information on those announcement dates.

本研究探討私募折價幅度及私募前後績效之影響因素，並將應募人分為內部人、積極投資人以及消極投資人三種，觀察不同應募人下的私募，其私募前及私募後是否有累計異常報酬。 實證結果發現，在私募前股價表現與私募對象之關係方面，當私募對象為內部人時，在私募前45日股價即開始下挫，之後的累計異常報酬皆為負值，其原因可能為內部人藉由套利交易，先行在集中市場上賣出手中原有持股，再用較低價格認購私募新股，此舉不但能使手中持股的成本降低同時也能維持既有股權。關於私募半年後的股價表現，內部人及積極投資人私募後的累計異常報酬顯著為正，代表內部人在投資私募新股時，可能隱含著未來公司有較好的投資機會；至於積極投資人後續績效為正，可能代表積極投資人未來將會扮演監督者的角色，有助於提高公司的價值。迴歸分析也顯示，當公司私募的價格相對於公司在私募定價日當時的股價折價越多時，私募之後的累計異常報酬越低，代表私募折價會降低公司價值，傷害現有股東的權益。 / This study investigates the effect of private placements on stockholder wealth before/after the events based on cumulative abnormal return for three categories of investors, namely, the insiders, active investors and passive investors. For private placements with insider investors, significant negative abnormal return prior to private placements may reveal sell arbitrage taken by insiders while significant positive abnormal return subsequent to private placements supports signaling theory. Evidence showing significant negative relation between price discount on private placements and subsequent business performance implies the price discount reduces market value and hence harmful to existing shareholders’ wealth.

This dissertation contains four essays on various topics in the fields of corporate finance and corporate governance. The first essay, entitled Corporate Governance and Ownership, presents an overview of the causes and consequences of, and possible remedies for, the separation of ownership and control in corporations. In particular, the essay addresses the costs and benefits of ownership concentration. A specific purpose is to put the role of ownership into perspective, while bringing the reader up to date with some recent developments. Essay number two, Shareholder Gains from Equity Private Placements: Evidence from the Stockholm Stock Exchange, contains an empirical investigation of the stockmarket’s reaction to announcements of equity private placements and rights issues. The essay sets out to test a range of hypotheses put forward in the literature. Extensive cross-sectional analyses of private placement discounts and abnormal returns are performed. The third essay is named Optimal Deterrence and Inducement of Take-overs: An analysis of Poison Pills and Dilution. This essay models how the ex ante wealth of shareholders could be increased with customized contractual provisions that affect takeover probabilities and premia. The proposed provisions resemble anti-takeover defense measures in the form of poison pill plans, and conversely, voluntary dilution schemes in the fashion prescribed by Sanford Grossman and Oliver Hart (1980). Finally, the fourth essay models the wealth effects of a particular takeover regulation, The Mandatory Bid Rule. This rule requires a potential bidder for a control position in a target firm to extend the offer to include any or all of the outstanding shares. Although the mandatory bid rule is aimed at the protection of minority shareholders, the essay argues that this regultion is not generally in the best interest of the shareholders. Each essay is self-contained and could, in principle, be read in any order chosen by the reader. However, for readers less familiar with the corporate finance literature, the first essay may also serve as a helpful introduction to the following three essays. / Diss. Stockholm : Handelshögsk.

Agency Costs of Controlling Minority Shareholders (coauthored with Henrik Cronqvist) estimates the agency costs of controlling minority shareholders (CMSs) using a panel of Swedish listed firms. CMSs are owners who have a control stake of the firm’s votes while owning only a minority fraction of the firm’s equity. The study documents that families in control are almost exclusively CMSs through an extensive use of dual-class shares. The results show that increased ownership of votes by a controlling owner is associated with an economically and statistically significant decrease in firm value, but that the decrease in firm value is significantly larger for firms with family CMSs than for firms with financial institutions or corporations in control. This indicates that the agency costs of family CMSs are larger than the agency costs of other controlling owners.Family Ownership, Control Considerations, and Corporate Financing Decisions: An Empirical Analysis analyzes the relation between concentrated family control and firms’ choice of capital structure for a panel of Swedish listed firms. The results suggest that the capital structure choices made by firms with families in control are influenced by the controlling families’ desire to protect their control, and that the resulting capital structures are likely to increase the agency costs of family control. The Choice between Rights Offerings and Private Equity Placements (coauthored with Henrik Cronqvist) analyzes the determinants of the choice between rights offerings and private equity placements using a sample of rights offerings and private placements made by listed Swedish firms. The results indicate that control considerations explain why firms make uninsured rights offerings. The evidence also suggest that private placements, and to some extent underwritten rights offerings, are made by potentially undervalued firms in order to overcome underinvestment problems resulting from asymmetric information about firm value. Furthermore, private placements are frequently made in conjunction with the establishment of a product market relationship between purchaser and seller, which is consistent with equity ownership reducing contracting costs in new product market relationships. Why Agency Costs Explain Diversification Discounts (coauthored with Henrik Cronqvist and Peter Högfeldt) studies diversification within the real estate industry, in which firms can diversify over property types and geographical regions. Similar to previous studies, this essay documents the existence of a diversification discount. However, the major cause of the diversification discount is not diversification per se but anticipated costs due to rent dissipation in future diversifying acquisitions. Firms expected to pursue non-focusing strategies do indeed diversify more, are valued ex ante at a 20% discount over firms anticipated to follow a focusing strategy, and are predominantly family controlled. The ex ante diversification discount is, therefore, a measure of agency costs.  The Difference in Acquirer Returns between Takeovers of Public Targets and Takeovers of Private Targets shows, for a sample of Swedish takeovers, that the average acquirer abnormal return is positive and significant when the target firm is privately held but insignificant when the target firm is listed on a stock exchange. These results are robust when controlling for sample selection problems and other variables capable of explaining acquirer returns. The evidence is consistent with greater acquirer bargaining power and resolution of information asymmetries in takeovers of private targets. / Diss. Stockholm : Handelshögskolan, 2002