However, they must use the general cash offer when they go public and list their shares on the ASE.
In contrast to general cash offers, in rights issues the new shares are acquired by existing shareholders.
While prior studies, relying on US data, have shown that announcements of general cash offers are associated with a significant price reduction of 3%, on average, of the firms' outstanding common stock, the evidence regarding rights issues is mixed.
There is a key difference between the studies on general cash offers and those on rights issues.