Dual Class Recapitalization

Dual Class Recapitalization

The new issue of common stock that a company distributes to current stockholders in exchange for previously-issued common stock. The new common stock usually has fewer voting rights. Dual class recapitalization increases the board of directors' control over the management of the company.
References in periodicals archive ?
Controlling for prior insider ownership, however, provides an indication of whether the results can reasonably be associated with the dual class recapitalization event, or whether they occurred because of other firm-specific factors, such as the firm's rate of growth, increased market liquidity, and hence, increased interest in the stock after the recapitalization, economy-wide trends, or chance.
To test this hypothesis, we compared the average dividend payout ratio for the period surrounding the announcement of the dual class recapitalization.
Panel A of Exhibit 5 indicates that the mean number of analysts following the sample of dual class recapitalization stocks was 5.
Targeted Stock differs from a dual class recapitalization, however, because voting rights are not reallocated to concentrate majority ownership among insiders.
These alternatives include equity carve-outs, dual class recapitalizations, and spin-offs.
These alternative methods include equity carve-outs, dual class recapitalizations, and spin-offs.
ACS has been considering alternatives to enhance shareholder value including the discussions with a group of private-equity investors, as well as the possible dual class recapitalization proposal described in the Company's September 30, 2005 proxy statement.
26, 1993, dual class recapitalization in which an equal number of "B" non- voting shares were issued to go with each share of common stock owned on or before Jan.
26, 1993, dual class recapitalization in which an equal number of "B" non-voting shares were issued to go with each share of common stock owned on or before Jan.
The advent of large hostile tender offers in the 1980s has precipitated a variety of corporate restructurings, including many going-private transactions, leveraged recapitalizations, and dual class recapitalizations.
The SEC, however, adopted a rule in 1988 that regulates the use of dual class recapitalizations, which purportedly were used often as antitakeover defenses.
Sisneros, 1992, "Substitute for Voting Rights: Evidence from Dual Class Recapitalizations," Financial Management (Autumn), 35-47.