This dissertation focuses on two central capital market transactions, takeovers and initial public offerings (IPOs), from both a theoretical and an empirical point of view. After an introductory chapter, the first two chapters analyse how minority shareholders are affected by a change in take-over regulation (introduction of the mandatory bid rule) in Germany in 1995. The last chapter focuses on the pricing and timing of going-public transactions. Chapter 2 focuses on the absolute wealth effect of the mandatory bid rule and formalises the trade-off minority shareholders of corporate raiders face with respect to the adoption of a mandatory tender offer after a shift in control. Under plausible assumptions about the distribution of security and control benefits, minority shareholders of acquirers profit from the adoption of the mandatory bid rule. A subsequent empirical study supports this hypothesis by measuring the stock price effects after the acceptance of the German Takeover Code. Chapter 3 uses a dataset of German dual-class shares during 1988-1997 to study how the change of corporate governance rules affects the price differential between voting and non-voting stock. First, the chapter discusses how mechanisms to separate control from cash-flow rights relate to the value of control. Second, the chapter analyses how minority voting and non-voting shareholders participate in transfers of corporate control under the alternative regulatory structures pre- and post- 1995. By providing an analysis of sequential going-public decisions. Chapter 4 outlines conditions under which the likelihood of a second IPO increases after a first firm has gone public ('hot issue markets'). Two effects can trigger the rise of hot issue markets in a setting with asymmetric and costly information about both firm quality and industry prospects: risk-induced selling pressure and informational free-riding on the industry news conveyed by a first IPO. Finally, the model offers an explanation for the empirical finding that hot issue markets exhibit a higher degree of underpricing than cold issue markets.

This study had a two-fold purpose. Firstly, to establish whether a model utilising a number of non-financial variables in conjunction with a model based on financial variables is able to provide a more accurate company financial distress model than a model based on financial variables only. Secondly, to reinforce the theoretical foundation of company financial distress and failure through an examination of existing studies in order to enhance insight into the financial distress and failure phenomenon. A phased approach was applied to identify a sample of 95 companies listed on the JSE. A questionnaire comprising 14 questions, divided into five broad categories based on the strategic capability of a subject company was employed. The published Director’s Report was used to evaluate the questions on a zero to five-point scale over a 10-year observation period. The relationship between the questionnaire test results and the De la Rey K-Score for the subject companies was tested utilising the Cramer’s V statistical test. The Cramer’s V test is a chi-square based measure of nominal association yielding a value between zero and one. A movement towards one indicates a strengthening relationship, in this instance, between the non-financial test result and the De la Rey K-Score. A movement towards zero is an indication of a weakening relationship. A limited test result in favour of a strengthening relationship was insufficient to prove that the primary objective of this study has been achieved. The secondary objective was achieved in view that this was an exploratory study. It is, against this background, that empirical research is recommended in order to prove that a model combining financial variables with true non-financial variables should provide a more accurate company distress prediction model. / Dissertation (MCom)--University of Pretoria, 2012. / Financial Management / unrestricted

A joint stock company is a typical example of a capital company whose principal element is a shareholder on whom rests the existence of a joint stock company. The shareholders enter the company as investors who want to increase the value of their investments. The management of the company has the competence of a professional management, which seeks to increase the particular investment and to strengthen the company's position in the market. However, there may be situations when the management of the company pursues different interests than the interests of the shareholders. Due to this reason it is necessary to clearly define the relationship among the shareholders as well as between the shareholders and the company. Legal status of the shareholders is defined as a set of rights and duties. A shareholder has partial rights that enable him to participate in the running of the company, including the right to attend the general meeting and to vote at it. Furthermore, the shareholder has the right to participate in profit distribution and to participate in distribution of the liquidation balance. The Business Corporation Act also grants special rights to the minority shareholders, i.e. qualified shareholders, which serve to protect them. A qualified shareholder has primarily the right to request the...

A joint stock company is a typical example of a capital company whose principal element is a shareholder on whom rests the existence of a joint stock company. The shareholders enter the company as investors who want to increase the value of their investments. The management of the company has the competence of a professional management, which seeks to increase the particular investment and to strengthen the company's position in the market. However, there may be situations when the management of the company pursues different interests than the interests of the shareholders. Due to this reason it is necessary to clearly define the relationship among the shareholders as well as between the shareholders and the company. Legal status of the shareholders is defined as a set of rights and duties. A shareholder has partial rights that enable him to participate in the running of the company, including the right to attend the general meeting and to vote at it. Furthermore, the shareholder has the right to participate in profit distribution and to participate in distribution of the liquidation balance. The Business Corporation Act also grants special rights to the minority shareholders, i.e. qualified shareholders, which serve to protect them. A qualified shareholder has primarily the right to request the...

This paper investigates the formation of the ownership structure and the corporate governance system of the Ukraine as a country in transition. Numerous studies consider that privatization results in the establishment of a proprietors’ motivation mechanism. On the other hand it causes ownership concentration in the hands of a few shareholders and managers. The goal of economic reform in transition and, largely, its pace, is measured by the degree to which shareholders participate in short- and long-term corporate value creation. Shareholder access to such created value depends on the ability of corporate “insiders”, especially executives and management, to claim a disproportionate share of corporate value (the “insider effect”). An econometric analysis of the correlation between privatization and macroeconomic factors studies the degree of effectiveness of economic reforming in Ukrainian regions.

We examine the financing choices of undiversified large shareholders or owner-managers in a continuous time structural model with rational expectations. The interplay between the objective of the undiversified, self-interested owner-manager who controls the firm and the valuation of the firms marketed claims by well-diversified outside investors, has a major impact on leverage and debt maturity choices as well as credit spreads. The effect of this interplay is particularly significant in a world where the representative investor (who determines asset prices in the economy) is risk-averse leading to nonzero market prices of systematic risk and risk premia of the firms investment opportunities. In a perfect information framework with no taxes or bankruptcy costs, we show that, the owner-manager could, depending on the projects characteristics, finance them exclusively with debt, exclusively with equity, or with a combination of equity and debt. Ceteris paribus, leverage increases with the expected growth rate of firm value under its investment opportunities, and decreases with its volatility. Debt maturity varies non-monotonically in a U-shaped manner with the expected growth rate, and decreases with the volatility. Our results reconcile empirical evidence on the variation of financing choices with firm characteristics that is not completely consistent with previous theories. The significant impact of the expected returns (therefore, risk premia) of firms investment opportunities on their leverage ratios, debt maturities, and credit spreads are important implications of our theory that cannot be obtained in these models or in models in which all agents are risk-neutral so that risk premia are zero. We empirically test the implications of our theory for the relationships among firms financing and debt maturity choices and the expected growth rate and volatility of their asset values. Controlling for all the significant determinants of firms financing and debt maturity choices identified by earlier studies, we show significant empirical support for our predictions.

Akcininkai, būdami bendrovės akcijų savininkais, yra suinteresuoti pelninga ir efektyvia bendrovės veikla, kadangi jie įsigydami bendrovės akcijų, siekia savo privačių interesų tenkinimo, t. y. materialinės naudos. Todėl akcininkai turi turėti galimybę aktyviai dalyvauti bendrovės valdyme, kontroliuoti bendrovės valdymo organų veiksmus ir tokiu būdu siekti apibrėžtų veiklos tikslų. Tokias galimybes akcininkams suteikia neturtinės teisės. Šiame darbe yra analizuojamos pagrindinės neturtinės akcininkų teisės Lietuvoje, pabrėžiama tinkamo šių teisių įgyvendinimo svarba. Tai pat yra nagrinėjami šių neturtinių teisių pažeidimo atvejai, jų sukeliamos pasekmės kitoms akcininkų turimoms teisėms, šių pažeistų teisių gynimo būdai, aptariamos pagrindinės problemos, su kuriomis susiduria akcininkai, tiek rezidentai, tiek nerezidentai, norėdami jomis pasinaudoti. Tai pat darbe yra nagrinėjamos Europos Komisijos pasiūlytos iniciatyvos gerinti bendrovių valdymą Europos Sąjungos valstybėse narėse, o ypač 2006 m. sausio 05 d. Europos Komisijos parengtas direktyvos pasiūlymas dėl bendrovių, kurių registruotoji buveinė yra valstybėje narėje ir kurių akcijomis leista prekiauti reguliuojamoje rinkoje, akcininkų balsavimo teisių panaudojimui, iš dalies keičianti Direktyvą 2004/109/EB. / Shareholders, being the owners of the company’s shares, are interested in a profitable and effective performance of the company, because by acquiring shares of the company they seek satisfaction of their own interests, i.e. material gain. Therefore, the shareholders should have an opportunity to be actively involved in the management of the company, control actions of the management bodies of the company and, thus, pursue defined business objectives. Such opportunities to shareholders are provided by their non-property rights. This work analyses the main non-property rights of shareholders in Lithuania, emphasizes the importance of proper implementation of these rights. It also deals with infringement instances of these non-property rights and their consequences to the rights enjoyed by other shareholders, remedies for such infringed rights and discusses major problems that shareholders, both residents and non-residents, face in exercising them. The work also examines the initiatives proposed by the European Commission to improve corporate management in EU member states, in particular the Proposal by the European Commission for a Directive of the European Parliament and of the Council of 5 January 2006 on the exercise of voting rights by shareholders of companies having their registered office in a Member State and whose shares are admitted to trading on a regulated market and amending Directive 2004/109/EC.

The problem addressed in this study is the lack of information relating to the viability of unbundling as a strategy for companies listed on the Zimbabwe Stock Exchange (ZSE). The study sought to determine whether the unbundling of listed companies on the ZSE has resulted in the maximisation of shareholder wealth and an improvement in the performance of the unbundled entities. The sample consists of spin-offs undertaken by listed companies between January 2000 and December 2005. The starting and ending points for the sample period were dictated by data availability. No spin-offs were identified prior to January 2000. The sample frame is composed of seven listed companies that have unbundled and whose unbundled entities were subsequently listed on the Zimbabwe Stock Exchange. In total sixteen companies emerged from the seven companies that unbundled and all sixteen companies were studied. Returns of parent and spun-off companies were computed to determine if unbundling resulted in cumulative abnormal returns. The value uplift of resultant firms was compared with the industrial index to determine if unbundling resulted in overall value uplift in the companies that unbundled. Questionnaires were also administered on financial executives of the parent and spun-off companies as well as stockbrokers to establish their views on the outcome of unbundling. The study finds that positive cumulative abnormal returns accrued as a result of unbundling and that value uplift in the resultant companies after unbundling is greater than the value uplift in the industrial index. The study also finds that significant drivers behind the decision to unbundle include the need to unlock shareholder value, focus on core competences and facilitation of future growth. Conclusions drawn from the study are that unbundling unlocks shareholder value, leads to performance improvement, results in value uplift of the unbundled entities and that it results in the elimination of information asymmetry. The study recommends that investors should position themselves in companies that have plans to unbundle as they tend to benefit significantly. It also concludes that unbundling is a viable strategy and consequently conglomerates that have experienced declines in performance as a result of diversification should unbundle. / Thesis (MBA)-University of KwaZulu-Natal, 2006.

This work is a comparative study of shareholders' powers to appoint and remove directors in the United Kingdom, United States and Germany as an internal corporate control mechanism. It highlights the entrenched positions of corporate managers in the face of shareholders' weakening powers in these systems. Having recognised the importance of shareholders' position as the contributors of corporate capital, the laws of these three systems give them the right to bring about changes in the control of companies by vesting power in the general meeting to determine the composition of corporate boards. Shareholders appoint directors to act on their behalf, the board in turn selects and monitors its executives to ensure that the interests of shareholders and other stakeholders are protected. The Anglo-American system is characterised by dispersed shareholding and management dominated boards, with the result that shareholders do not exercise their voting rights effectively. Under the German two-tier board system companies are accountable to a wide range of stakeholders and have a different structure of shareholding, where banks control the majority of shares. Despite the absence of management-dominated boards in that system the depository share system together with the practice of co-determination tend to restrict shareholders' participation in corporate control. The reality is that directors may 2 end up using certain devices to entrench themselves on the board so as to restrict the ability of shareholders to remove them. This thesis advocates a greater role for shareholders through improved opportunities for them to use their voting powers in determining the composition of their boards. It makes various recommendations in the different areas in which shareholders face difficulties in exercising these powers. It is hoped that the implementation of these suggestions will result in a system which will enable shareholders to exercise their voting powers more effectively for the purpose of controlling their companies.

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