IPO question help

Hi,

I was wondering if anyone knew of any solid reasons of why a subsidiary of a public parent company should IPO. The only reason I can think of is raising awareness of the subsidiary in the region e.g. Asian business of an international company.

Thanks.

 
Best Response

Do you mean for example the case that eBay sold PayPal? Well there are several reasons for that, one might be that the parenty Company does no longer think that the subsiduary is profitable/that the Money generate by such a sale can be used better on a different Project/be paid out to the shareholders. Another reason might be that the subsiduary no longer belongs to the core strategy, so it is span off. Lastly, a subsiduary can also be sold to offer Investors the possibility to directly invest into that Business without financing all other operations of the parent Company. hope that is what you were looking for

 

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