Why do private acquirers pay so little compared to public acquirers?
AbstractUsing the longest event window, we find that public target shareholders receive a 63% (14%) higher premium when the acquirer is a public firm rather than a private equity firm (private operating firm). The premium difference holds with the usual controls for deal and target characteristics, and it is highest (lowest) when acquisitions by private bidders are compared to acquisitions by public companies with low (high) managerial ownership. Further, the premium paid by public bidders (not private bidders) increases with target managerial and institutional ownership.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Financial Economics.
Volume (Year): 89 (2008)
Issue (Month): 3 (September)
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Web page: http://www.elsevier.com/locate/inca/505576
Private equity acquisitions Target abnormal returns;
Other versions of this item:
- Leonce Bargeron & Frederik Schlingemann & Rene M. Stulz & Chad Zutter, 2007. "Why Do Private Acquirers Pay So Little Compared to Public Acquirers?," NBER Working Papers 13061, National Bureau of Economic Research, Inc.
- Bargeron, Leonce & Schlingemann, Frederick & Stulz, Rene & Zutter, Chad, 2007. "Why Do Private Acquirers Pay So Little Compared to Public Acquirers?," Working Paper Series 2007-8, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
- G3 - Financial Economics - - Corporate Finance and Governance
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