Authors: Apostolos Dasilas, Vasileios Oikonomou, Antonios Tsianakidis

Title: IPOs vs reverse takeovers: Cross-country evidence

Abstract

The conventional listing mechanism of an initial public offering (IPO) is considered to be expensive and time-consuming in terms of high registration and underwriting fees as well as the time needed to be completed. Reverse takeovers have been recently emerged as an alternative route to go public that requires less time and listing expenses. The current study examines the wealth effects of a sample of 224 reverse takeover announcements (RTOs) that took place in Europe between 1996 and 2015 and a matched sample of IPOs that occurred over the same period. Employing the classical event study methodology as well as regression analysis, we find that both RTOs and IPOs exhibit comparable short-term and long-term value effects. However, RTO firms exhibit better operating performance than their control IPO counterparts in the post-going public period. By splitting the overall population into UK and non-UK sub-samples, we show that our main results are not UK-driven.