I am curious to know as a shareholder of a company what happens when a company decides to float one of its subsidaries. Do the existing shareholders automatically recieve free shares in the new float, or are they available at a discounted price or just given the option to purchase prior to the public invite. Are there rules to govern this?
There seems to me to be an unfairness (potentially) to existing shareholders as the former parent company would lose value and its share price decreases, then the shareholder is made to pay for something they previously owned. At the same time the board (probably the same personnel) gain access to additional board fees, and share issues etc.
Anyone point me in the direction to learn a little more or share past experiences on what happens. Are these seen as good opportunities which I imagine depends on the bullish or bearish mood of the market.
Thanks in advance