Equity Sales in Belgian Corporate Groups: Expropriation of Minority Shareholders? A Clinical Study

Posted: 22 Sep 2003

See all articles by An Buysschaert

An Buysschaert

Vrije Universiteit Brussel (VUB) - Micro-economics for Profit and Non Profit Sector (MICE)

Marc Deloof

University of Antwerp; University of Antwerp - Antwerp Management School

Marc Jegers

Free University of Brussels (VUB) - Micro-Economics for Profit and Non Profit Sector (MICE)

Abstract

In Belgian corporate groups, complex pyramidal structures and interlocking ownership lead to separation of ownership and control. This may generate incentives for the controlling shareholder to divert resources within the group through intragroup equity sales. This in turn could lead to significant private benefits at the expense of the minority shareholders. We test this hypothesis by investigating the stock price reaction to the announcement of equity sales in Belgian groups. Our results suggest that intragroup equity sales create value for minority shareholders. Equity sales between group members and non-group members do not seem to affect the value for minority shareholders in Belgian groups.

Keywords: corporate groups, private benefits, tunneling, event study

JEL Classification: G14, G32, G34

Suggested Citation

Buysschaert, An and Deloof, Marc and Jegers, Marc, Equity Sales in Belgian Corporate Groups: Expropriation of Minority Shareholders? A Clinical Study. Journal of Corporate Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=432301

An Buysschaert

Vrije Universiteit Brussel (VUB) - Micro-economics for Profit and Non Profit Sector (MICE) ( email )

Brussels
Belgium
+32-2-629 21 18 (Phone)
+32-2-629 20 60 (Fax)

Marc Deloof (Contact Author)

University of Antwerp ( email )

Prinsstraat 13
Faculteit TEW
Antwerpen, 2000
Belgium
+32 3 265 41 69 (Phone)
+32 3 265 47 99 (Fax)

HOME PAGE: http://https://www.uantwerpen.be/en/staff/marc-deloof/

University of Antwerp - Antwerp Management School ( email )

Boogkeers 5
Antwerp, 2000
Belgium

Marc Jegers

Free University of Brussels (VUB) - Micro-Economics for Profit and Non Profit Sector (MICE) ( email )

Brussels
Belgium
+32-2-629 21 13 (Phone)
+32-2-629 22 82 (Fax)

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