Earnings Management and Voluntary De-listing: The Case of BOSOs in France
Martinez, Isabelle
Earnings Management and Voluntary De-listing: The Case of BOSOs in France - 2011.
59
This paper investigates the accounting behavior of managers who voluntarily delist their companies in the context of a BOSO (the French mechanism of Buyout Offer with Squeeze Out). We postulate the hypothesis of negative earnings management before the delisting in order to minimize the price offered to minority shareholders. A quantitative study is performed using a unique dataset spanning the period 1997-2006. This data set consists of 140 French firms, of which 70 were voluntarily delisted via BOSO and 70 were business-matched control firms. We measure the discretionary accruals and we find a significant earnings management one year before the delisting for the firms which were voluntarily delisted (around -6% of total assets). Conversely, the control sample exhibits no earnings management. The results show more aggressive earnings management when the majority shareholder did not enhance its control just before the delisting.
Earnings Management and Voluntary De-listing: The Case of BOSOs in France - 2011.
59
This paper investigates the accounting behavior of managers who voluntarily delist their companies in the context of a BOSO (the French mechanism of Buyout Offer with Squeeze Out). We postulate the hypothesis of negative earnings management before the delisting in order to minimize the price offered to minority shareholders. A quantitative study is performed using a unique dataset spanning the period 1997-2006. This data set consists of 140 French firms, of which 70 were voluntarily delisted via BOSO and 70 were business-matched control firms. We measure the discretionary accruals and we find a significant earnings management one year before the delisting for the firms which were voluntarily delisted (around -6% of total assets). Conversely, the control sample exhibits no earnings management. The results show more aggressive earnings management when the majority shareholder did not enhance its control just before the delisting.
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