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Paper: eres2011_35
| Paper title: | Wealth Effects on Unitholders following Property Company and A-REIT Rights Issues |
| Authors: | Dimovski, Bill |
| Summary: | Over A$22 billion of new equity capital has been raised by way of rights issues by 71 Australian listed property entities (including A-REITs) during 2001 to 2009. While the rights offerings raise important equity capital for the issuers, this study investigates whether investors have profited from the rights offerings. The theoretical ex-rights share price is calculated for these issuers to find that on average subscribers have actually suffered a decrease in wealth. This study examines factors that might influence this percentage difference to the theoretical ex-rights share price following rights issue subscriptions. The findings suggest that issues that have a greater proportion that is underwritten and those with a higher risk profile offer a greater likelihood that investors will increase their wealth from the issue. There is some evidence also, regarding A-REITs, that larger discounts may reduce the likelihood of investors increasing their wealth from the issue. |
| Type: | |
| Year of publication: | 2011 |
| Keywords: | rights issues, equity capital, ex-rights share price |
| Series: | ERES:conference |
| Download paper: | /pdfs/eres2011_35.content.ppt |
| Citation: | Dimovski, Bill (2011). Wealth Effects on Unitholders following Property Company and A-REIT Rights Issues. 18th Annual European Real Estate Society Conference in Eindhoven, the Netherlands, http://itc.scix.net/paper/eres2011_35 |
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