Resumen de How far do owners reach into the divestiture process? Blockholders and the choice between spin-off and sell-off
Donald D. Bergh, Barton M. Sharp
Recently, outside blockholders, external owners that hold 5% or more of their firms’ outstanding common stockholdings, have been pressuring their firms to engage in divestiture activities. This study considers whether the influence of those owners also extends to how the divestiture is implemented, whether through spin-off or sell-off. Tests of an agency theory model using data from 205 divestitures show that the adoption of spin-offs or sell-offs is associated with the amount of outstanding common stockholdings held by outside blockholders and the size of the unit divested. Spin-offs are used more frequently when outside blockholders own more of the divesting firm’s stockholdings and the divested unit is larger, while sell-offs tend to be selected when outside blockholders own less stock and the divested business is smaller. Consistent with agency theory expectations, spin-offs would allow the blockholders to decide whether to hold or sell their interests in the divested firm, a decision they could make in accordance with their individual portfolio risks. Sell-offs of small units could be used to preserve organizational diversity and produce proceeds that would help the divesting firm’s managers pursue their self-interests. Overall, outside blockholders appear to shape how divestitures are done, even if they cannot directly intervene in their firms’ operations.
