Articles scientifiques

A Model of Financial Market Liquidity Based on Intermediary Capital


Journal of the European Economic Association

avril-mai 2010, vol. 8, n°2-3, pp.456-466

Départements : Finance, GREGHEC (CNRS)

Acquisition Values and Optimal Financial (In)Flexibility

U. HEGE, C. Hennessy

Review of Financial Studies

juillet 2010, vol. 23, n°7, pp.2865-2899

Départements : Finance, GREGHEC (CNRS)

This article analyzes optimal financial contracts for an incumbent and potential entrant accounting for prospective asset mergers. Exercising a first-mover advantage, the incumbent increases his share of surplus by issuing public debt that appreciates in the event of merger. Incumbent debt reduces the equilibrium value of entrant assets and thus reduces the return to (likelihood of) entry through two channels: venture capitalists recover less in default and ownership rights provide weaker managerial incentives. High incumbent leverage has a countervailing cost, since the resulting debt overhang prevents ex post efficient mergers if merger surplus is low. Event risk covenants limiting counterparty debt are optimal for the incumbent, further limiting the entrant's share of merger surplus. A poison-put covenant is also optimal for the incumbent, allowing him to extract the same surplus with lower debt face value.

Auctioned IPOs: The U.S. Evidence

F. Degeorge, F. DERRIEN, K. Womack

Journal of Financial Economics

novembre 2010, vol. 98, n°2, pp.177-194

Départements : Finance, GREGHEC (CNRS)

accepté le 29 juillet 2009Between 1999 and 2007, WR Hambrecht completed 19 initial public offerings (IPOs) in the US using an auction mechanism. We analyze investor behavior and mechanism performance in these auctioned IPOs using detailed bidding data. The existence of some bids posted at high prices suggests that some investors (mostly retail) try to free-ride on the mechanism. But institutional demand in these auctions is very elastic, suggesting that institutional investors reveal information in the bidding process. Investor participation is largely predictable based on deal size, and demand is dominated by institutions. Flipping is at most as prevalent in auctions as in bookbuilt deals. But, unlike in bookbuilding, investors in auctions do not flip their shares more in 'hot' deals. Finally, we find that institutional investors, who provide more information, are rewarded by obtaining a larger share of the deals that have higher ten-day underpricing. Our results therefore suggest that auctioned IPOs can be an effective alternative to traditional bookbuilding.Keywords: Initial public offerings; Investment banking; Auctions

Capital Structure Decisions: Evidence From Deregulated Industries


Journal of Financial Economics

février 2010, vol. 95, pp.249-274

Départements : Finance, GREGHEC (CNRS)

Corporate Political Contributions and Stock Returns

M. Cooper, H. Gulen, A. V. OVTCHINNIKOV

The Journal of Finance

avril 2010, vol. 65, pp.687-724

Départements : Finance, GREGHEC (CNRS)

pas sous affiliation HEC