Large Shareholdings and Corporate Control: An Analysis of Stake Purchases by French Holding Companies

The paper analyses the value creation benefits of the holding form of organisation in France by empirically examining the effects of non‐controlling stake purchases on target shareholder wealth, operational performance and bidder shareholder returns for a sample of 122 stake purchases in French list...

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Bibliographic Details
Published inEuropean financial management : the journal of the European Financial Management Association Vol. 3; no. 1; pp. 23 - 43
Main Authors Banerjee, Saugata, Leleux, Benoit, Vermaelen, Theo
Format Journal Article
LanguageEnglish
Published Oxford, UK and Boston, USA Blackwell Publishers Ltd 01.03.1997
Subjects
Holding companies
large shareholders
stake purchases
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Summary:The paper analyses the value creation benefits of the holding form of organisation in France by empirically examining the effects of non‐controlling stake purchases on target shareholder wealth, operational performance and bidder shareholder returns for a sample of 122 stake purchases in French listed companies. The evidence puts into question the ability of holding companies to create value for the firms they purchase stakes in or their own shareholders, adding to the current debate on the relative role played by large shareholders and the external market for corporate control as ultimate disciplining devices.
Bibliography:ark:/67375/WNG-GFZ75V8B-4
ArticleID:EUFM029
This research project has benefited at various stages from financial support provided by the R&D Department at INSEAD, the Sasakawa Young Leaders Fellowship Fund in Tokyo (Japan), the College Interuniversitaire pour les Etudes Doctorales en Sciences du Management (CIM) in Brussels (Belgium), and the Board of Research at Babson College. We are grateful for the feedback received from participants at the 1996 European Financial Management Association Conference, the 1996 European Finance Association Conference, the 1996 Indian Econometric Society Meetings and the 1995 Asia Pacific Finance Association Conference. Special thanks to John Doukas and Remy Paliard for their invaluable help in revising the successive drafts of this paper.
istex:75F1D653323833D616934CDB56DD670C3DE34DA4
ISSN:1354-7798
1468-036X
DOI:10.1111/1468-036X.00029