23 Pages Posted: 15 Apr 2006
UK firms going public have a choice between public offers and placings. This choice has important implications in terms of who bears the risk of the issue failing and of its costs. We find that firms with higher ex ante uncertainty choose a placing contract. Highly reputable sponsors and creditor screening serve as signals of firm quality, enabling such firms to choose a public offer. Large and multinational firms usually choose a public offer whereas there is some evidence that very small issues choose a placing. Finally, the 'hotness' of the IPO market increases the probability of placings.
Suggested Citation: Suggested Citation
Goergen, Marc and Khurshed, Arif and Mudambi, Ram, The Strategy of Going Public: How UK Firms Choose their Listing Contracts. Journal of Business Finance & Accounting, Vol. 33, No. 1-2, pp. 79-101, January/March 2006. Available at SSRN: https://ssrn.com/abstract=886408 or http://dx.doi.org/10.1111/j.1468-5957.2006.00657.x
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