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

EUROPEAN FINANCIAL MANAGEMENT, Vol. 3 No. 1, 1997

Posted: 11 Nov 1996

See all articles by Benoit Leleux

Benoit Leleux

MD - International (Institute for Management Development) - Entrepreneurship and Finance

Saugata Banerjee

affiliation not provided to SSRN

Theo Vermaelen

INSEAD - Finance; European Corporate Governance Institute (ECGI)

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Abstract

The paper analyzes the value creation benefits of the holding form of organization 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.

JEL Classification: G32, G34

Suggested Citation

Leleux, Benoit and Banerjee, Saugata and Vermaelen, Theo, Large Shareholdings and Corporate Control: An Analysis of Stake Purchases by French Holding Companies. EUROPEAN FINANCIAL MANAGEMENT, Vol. 3 No. 1, 1997, Available at SSRN: https://ssrn.com/abstract=7889

Benoit Leleux (Contact Author)

MD - International (Institute for Management Development) - Entrepreneurship and Finance ( email )

Ch. de Bellerive 23
P.O. Box 915
CH-1001 Lausanne
Switzerland

Saugata Banerjee

affiliation not provided to SSRN

Theo Vermaelen

INSEAD - Finance ( email )

Boulevard de Constance
F-77305 Fontainebleau Cedex
France
33 1 60 72 42 63 (Phone)
33 1 60 72 40 45 (Fax)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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