FINE 434 Lecture Notes - Lecture 6: Tracking Stock, Stock Market, Tui Group
Document Summary
Equity carve-outs can be the first stage of a broader divestiture, preceding: sale of remaining interest of subsidiary to shareholders, spinoff of remaining ownership to shareholders. Split-ups employ a variety of methods, usually spinoffs. Tracking stock may be first step of a spinoff or exchange offer. Choi(cid:272)e (cid:271)et(cid:449)ee(cid:374) (cid:373)ethods should (cid:271)e (cid:373)ade (cid:449)ith sha(cid:396)eholde(cid:396)s" i(cid:374)te(cid:396)ests i(cid:374) (cid:373)i(cid:374)d; e. g. , (cid:272)a(cid:396)(cid:448)e-out is preferable over spinoff if: Parent wants to keep long-term stake in subsidiary. Many possible motives for a firm to restructure. Direct relation between corporate strategy and corporate restructuring. Corporate focus often cited as restructuring reason, but focused companies also must review strategic alternatives due to market changes. Firms restructure to remain competitive, to correct mistakes, and to respond to change. If there are no transaction or information costs, corporate organisation is irrelevant. Managers cannot improve value by chopping firm into pieces.
