Long term performance following rights issues and open offers in the UK

P. Ngatuni, J. Capstaff, A. Marshall

Research output: Contribution to journalArticlepeer-review

16 Citations (Scopus)


This study finds evidence of significant long-term underperformance following rights issues made during 1986-95 in the UK. The findings are resilient to a number of methodological controls. In contrast, our results for a smaller sample of open offers made during 1991-95 show strong positive performance over a 5-year post-issue period, implying that firms making open offers had better growth prospects than firms making rights issues. During 1986-90, a period when open offers were rarely used, firms appeared to be making rights issues to exploit overvaluation. However, this was not evident for rights issues made during 1991-95, a period when open offers were more commonly used.
Original languageEnglish
Pages (from-to)33-64
Number of pages31
JournalJournal of Business Finance and Accounting
Issue number1-2
Publication statusPublished - Mar 2007


  • rights issues
  • open offers
  • long-term performance
  • business finance
  • accountancy

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