An Empirical Investigation of Real Estate Divestitures
Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
This paper examines shareholder wealth effects surrounding announcements of voluntary sell-offs of real estate assets on the Stockholm Stock Exchange during the period 1990 to 2001. For a sample of 47 firms announcing sell-offs, we document a significant 2.3% positive abnormal return at the announcement day. In addition, we divide the sample into two sub-groups based on whether the divesting firm’s business is real estate or not. We find that divesting firms in a non-real estate business experience (sample of 16) a significant positive abnormal return of 2.5%, while those firms in the real estate business (sample of 31) experience a significant positive abnormal return of only 1.9%. Furthermore, we find evidence of a positive correlation between the ratio of the price of the divested real estate asset to the parent firm’s market value and the wealth gains in connection with sell-off announcements.
Place, publisher, year, edition, pages
IdentifiersURN: urn:nbn:se:su:diva-2301OAI: oai:DiVA.org:su-2301DiVA: diva2:191239