Name
Monitoring, agency costs, and seasoned equity offerings
Date & Time
Tuesday, July 7, 2026, 3:55 PM - 4:20 PM
Description
We study how quasi-regulatory oversight mitigate agency problems during SEOs. The UK Pre-Emption Group (PEG) temporarily relaxed pre-emption rights during COVID-19,
allowing larger equity issuance without formal shareholder approval but under heightened monitoring. Analyzing 551 SEOs from 2017–2023, we find positive announcement
returns for PEG-endorsed issuances. Among monitored firms, higher returns are concentrated in firms with higher ex-ante agency costs and opaque information environments.
In contrast, among unmonitored firms, higher returns are linked to those facing stronger liquidity needs. Overall, our findings show that quasi-regulators can substitute for formal governance mechanisms when balancing financing flexibility and shareholder protection.
Speakers
Keywords
Seasoned equity offering, agency costs, information environment, pre-emption rights, special purpose vehicles
Theme
CORPORATE FINANCE
Author 1
Mario Schabus
Author 2
Nadia Massoud
Author 3
Yifan Zhou
Author 4
Alon Kalay