A positive offer price revision, an equity carveout, or a reverse LBO have no affect on the level of post-IPO institutional ownership.
Other control variables include the log of market capitalization, share overhang, a measure of underwriter reputation, and dummy variables for venture capital backed, equity carveout, reverse LBO, and NASDAQ-listed deals.
The control variables in our regressions indicate that an IPO firm is more likely to be acquired if it is underwritten by a top tier investment bank, if it is an equity carveout, or if it lists on NASDAQ.
Lastly, in Model 4, we consider the impact of equity carveouts by interacting the equity carveout indicator with the M&A activity measure and each of the control variables.
Dummies for equity carveouts and reverse leveraged buyouts (LBOs), both of which are IPOs involving firms with a prior history as publicly traded entities, are included as controls.
Finally, equity carveouts are associated with less underpricing.
The groups we consider are IPOs backed by VCs compared to those that are not, firms in high-tech industries compared to all other industries, young firms compared to old firms, and equity carveouts compared to all other IPOs.
Relative to focused firms, issues by diversified firms are more likely to be equity carveouts and less likely to be in a High-Tech industry.
To control for this possibility, we include dummy variables for equity carveouts and reverse leveraged buyouts (LBOs).
New markets, new products, and new definitions excite a host of industries, and equity carveouts
, spinoffs, and demergers are regular occurrences.