Delistings, Controlling Shareholders and Firm Performance in Europe

32 Pages Posted: 15 Mar 2014

See all articles by Ettore Croci

Ettore Croci

Catholic University of the Sacred Heart of Milan

Alfonso Del Giudice

Catholic University of the Sacred Heart of Milan - Department of Economics and Business Administration

Date Written: March 2014

Abstract

Using a novel European data set, we investigate the role of controlling shareholders in delisting decisions. Minority shareholders earn lower abnormal returns when the controlling shareholder takes the company private, but this lower premium disappears when we control for the firm's characteristics. After the delisting, firms delisted by their controlling shareholders do not improve their operating performance. These results do not suggest that controlling shareholders expropriate minority investors with minority freeze‐outs. Our findings are not due to heterogeneity across controlling shareholders. In fact, when we focus on family controlling shareholders, we find no evidence of performance improvement after the delisting.

Keywords: delisting, freeze‐out, private firm, going private

Suggested Citation

Croci, Ettore and Del Giudice, Alfonso, Delistings, Controlling Shareholders and Firm Performance in Europe (March 2014). European Financial Management, Vol. 20, Issue 2, pp. 374-405, 2014. Available at SSRN: https://ssrn.com/abstract=2409360 or http://dx.doi.org/10.1111/j.1468-036X.2011.00640.x

Ettore Croci (Contact Author)

Catholic University of the Sacred Heart of Milan ( email )

Largo Gemelli, 1
Via Necchi 9
Milan, MI 20123
Italy

Alfonso Del Giudice

Catholic University of the Sacred Heart of Milan - Department of Economics and Business Administration ( email )

20123 Milano
Italy

Register to save articles to
your library

Register

Paper statistics

Downloads
0
Abstract Views
399
PlumX Metrics