The art of the split: Activist-induced divestitures & corporate value creation
dc.contributor | Aalto University | en |
dc.contributor | Aalto-yliopisto | fi |
dc.contributor.advisor | Puttonen, Vesa | |
dc.contributor.author | Kossila, Karla | |
dc.contributor.department | Rahoituksen laitos | fi |
dc.contributor.school | Kauppakorkeakoulu | fi |
dc.contributor.school | School of Business | en |
dc.date.accessioned | 2024-08-25T16:07:35Z | |
dc.date.available | 2024-08-25T16:07:35Z | |
dc.date.issued | 2024 | |
dc.description.abstract | This study investigates how and if hedge fund activists create value by breaking-up and splitting companies utilizing a sample of 3,834 divestitures in the U.S. between 1990-2024. We find activists create substantial value throughout their involvement in the corporate divestiture process, displaying up to 7.8% incremental cumulative abnormal returns from campaign to divestiture. Magnitudes of which are economically meaningful, amounting to approximately USD 1.2bn in incremental shareholder value. We show activists drive value creation by acting as external disciplinaries, pushing management to divest proportionally larger assets, otherwise outside managements core competencies and interests. Moreover, activists use their extensive experience and networks in the market for corporate control to influence divestiture execution, visible through enhanced market timing, increased probability of sale to a financial acquirer, and a tendency to utilize exotic structures such as spin-offs, and professional deal certainty enhancing transaction terms. | en |
dc.format.extent | 53 + 7 | |
dc.identifier.uri | https://aaltodoc.aalto.fi/handle/123456789/130064 | |
dc.identifier.urn | URN:NBN:fi:aalto-202408255625 | |
dc.language.iso | en | en |
dc.location | P1 I | fi |
dc.programme | Finance | en |
dc.subject.keyword | investor activism | en |
dc.subject.keyword | hedge funds | en |
dc.subject.keyword | divestitures | en |
dc.subject.keyword | M&A | en |
dc.subject.keyword | corporate finance | en |
dc.title | The art of the split: Activist-induced divestitures & corporate value creation | en |
dc.type | G2 Pro gradu, diplomityö | fi |
dc.type.ontasot | Master's thesis | en |
dc.type.ontasot | Maisterin opinnäyte | fi |
local.aalto.electroniconly | yes | |
local.aalto.openaccess | no |