Abnormal returns through spin-offs: Empirical review of Swedish spin-off cases with announcement date between 2004-2018

Detta är en C-uppsats från Handelshögskolan i Stockholm/Institutionen för finansiell ekonomi

Sammanfattning: Previous international studies conducted within the field of spin-offs have reported significant excess returns around spin-offs' date of announcement. This study examines (1) whether Swedish spin-offs with announcement dates between 2004 and 2018 generate additional shareholder value in terms of achieving excess returns. Additionally, (2) the excess return of the spun-off entity is compared to the one of the parent firm for periods following the first trading day of the spun-off entity. The sample consists of 28 spun-off entities and parent firms operating in a variety of industries, with the financial sector being excluded. Excess returns are measured in terms of cumulative abnormal returns. Our findings suggest strong statistical evidence at 1% significance that positive cumulative abnormal returns are obtained between the spin-off's date of announcement and its ex-date. Also, the result suggests that there is weak statistical evidence of c10% regarding that the excess return of the parent firm is equal with the spun-off entity's excess return following the first trading day of the spun-off entity. Finally, a speculation follows regarding potential explanatory factors behind the abnormal return realized.

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