Long-run performance of corporate spin-offs and sell-offs: Evidence from the JSE limited
South African Journal of Economic and Management Sciences
| Field | Value | |
| Title | Long-run performance of corporate spin-offs and sell-offs: Evidence from the JSE limited | |
| Creator | Nkongho, Mitteran E. Makina, Daniel | |
| Description | Background: Prior to 1994, there were artificial restrictions on South African corporations as a result of isolation and sanctions. Thus, corporate unbundling activities in South Africa are still new relative to their overseas counterparts. Of recent, no study has vividly examined the long-run performance of spin-offs and sell-offs on the JSE Limited. In the most recent study on spin-offs and sell-offs, performance was investigated for less than 2 years. Long-run performance of spin-offs and sell-offs should be examined for at least 3 years in line with overseas literature. In order to fill the gap in previous literature, this study updates existing literature, and extends the investigation horizon to 4 years.Aim: This study seeks to investigate the long-run performance of spin-offs and sell-offs on the JSE Limited.Settings: This study matches the performance of an event firm to that of a non-event firm. The matching was done at sector and industrial level, using the value of equity as a matching measure. Performance was examined between 2000 and 2016, for up to 4 years.Methods: The method of analysis is the matching firm technique under buy and hold abnormal returns. The creation of shareholder’s wealth was investigated for 26 spin-offs, 17 parent spin-offs, 16 sell-offs and 23 parent sell-offs.Results: Abnormal returns are significantly positive for spin-offs, parent spin-offs and sell-offs for 1–4 years after unbundling. Only parent sell-offs failed to follow this path.Conclusion: According to this study, spin-offs and sell-offs unlock shareholders’ wealth for up to 4 years on the JSE Limited. | |
| Publisher | AOSIS Publishing | |
| Date | 2020-12-07 | |
| Identifier | 10.4102/sajems.v23i1.3683 | |
| Source | South African Journal of Economic and Management Sciences; Vol 23, No 1 (2020); 10 pages 2222-3436 1015-8812 | |
| Language | eng | |
| Relation |
The following web links (URLs) may trigger a file download or direct you to an alternative webpage to gain access to a publication file format of the published article:
https://sajems.org/index.php/sajems/article/view/3683/2233
https://sajems.org/index.php/sajems/article/view/3683/2232
https://sajems.org/index.php/sajems/article/view/3683/2234
https://sajems.org/index.php/sajems/article/view/3683/2230
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