White Knights or Machiavellians? Understanding the motivation for reverse takeovers in Singapore and Thailand

Pavabutr, Pantisa

doi:10.1007/s11156-019-00865-w

Cited by 5 publications

(4 citation statements)

References 18 publications

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“…Then, they can escape from the distressing situation. Pavabutr (2020) also study an event study of RTO firm in Singapore and Thai market and find that there is a significant positive return on the target firm when the announcement of RTO occurs. The distressed firm has the highest cumulative abnormal return around RTO announcements.…”

Section: Characteristic Of Reverse Mergermentioning

confidence: 95%

“…RTO provides the opportunity to exit the market of a public company. Shareholders of a public company can recover some of their bad investments by selling the share to a private firm (Pavabutr, 2020). Then, they can escape from the distressing situation.…”

Section: Characteristic Of Reverse Mergermentioning

confidence: 99%

“…Apart from the percentage ownership that the private firm obtains from the public company, we purpose that the premium that the private firm paid to the public firm should play a role in predict the operating performance. In RTO transactions, there are arising of "Premium" (see Brown Philip andet al, 2010 andPavabutr, 2020). The premium varies depending on each deal.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

“…Many researchers measure the premium in the various way with different length time (see; Pavabutr, 2020, Moeller et.al, 2004, Officer ,2003, and Antoniou et.al,2008. However, the premium in the RTO transaction is not specified in the term sheet of the deal.…”

Section: Measures Of Premium and Ownershipmentioning

confidence: 99%

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Premium, ownership and operating performance in RTO

Rungpiboonsopit

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A reverse takeover is an alternative method of listing instead of IPO. Compared to IPO, firms using RTO can avoid the stringent requirement of IPO and disclose less information. Hence, these transactions were viewed as suspicious transactions. The U.S-SEC also issued the warning that investors should be careful when considering investing in the RTO firm. However, it is unlikely that investors in the market can separate between the good RTO firm and the bad RTO firm because of the loose requirement of RTO which led to the arising of asymmetric information between investors and RTO firm. As a result, in this study, we aim to raise the research question about “Can we separate between good performance RTO firm and bad performance RTO firm?”. We examine 59 reverse takeovers in the U.S. stock market during 2007-2018. We then suggest that the premium that a private firm paid to a public firm and ownership that a private firm obtained from a public firm after a merger might be a signal to separate between good performance RTO and bad performance RTO. By examining the relationship between these two variables and change in operating performance, we cannot find evidence that these two variables can play a role to imply post-RTO operating performance.

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Section: Characteristic Of Reverse Mergermentioning

confidence: 95%

Section: Characteristic Of Reverse Mergermentioning

confidence: 99%

Section: Hypothesis Developmentmentioning

confidence: 99%

Section: Measures Of Premium and Ownershipmentioning

confidence: 99%

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Premium, ownership and operating performance in RTO

Rungpiboonsopit

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Strategic choices in going public: ESG performance implications in China

Cheng,

Gao,

Liu

et al. 2024

Bus Strat Env

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Choices in going public are important business strategies that can influence Environmental, Social and Governance (ESG) performance through varying levels of regulatory scrutiny, investor expectations, governance improvements, public attention and strategic focus. We investigate the impact of listing approach on ESG performance in China over the period of 2009 to 2022, by comparing the ESG performance of firms going public via initial public offering (IPO) versus reverse merger (RM). Consistent with our institutional, legitimacy and averse‐selection hypotheses, we find that RM firms exhibit significantly lower ESG performance compared with IPO firms, a difference we attribute to the greater performance pressure, higher litigation risk, greater financing constraints and poorer internal controls experienced by RM firms. These factors likely reduce management's willingness to invest in and improve ESG outcomes. However, as time passed, the discrepancy in ESG performance between RM firms and IPO firms gradually diminished. Additionally, the nature of state ownership and reduced competitive pressure in the industry also serve to mitigate the negative impact of RMs on firms' ESG performance. To promote sustainable development, going public via IPO offers a better business strategy, creating shared value among a broader range of stakeholders, including socially responsible investors, advocacy groups and regulators.

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iCREST: International Cross-Reference to Exchange-Based Stock Trend Prediction Using Long Short-Term Memory

Chaudhari

Thakkar

2021

Lecture Notes in Networks and Systems

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White Knights or Machiavellians? Understanding the motivation for reverse takeovers in Singapore and Thailand

Cited by 5 publications

References 18 publications

Premium, ownership and operating performance in RTO

Premium, ownership and operating performance in RTO

Strategic choices in going public: ESG performance implications in China

iCREST: International Cross-Reference to Exchange-Based Stock Trend Prediction Using Long Short-Term Memory

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