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The appeal of private targets in international acquisitions

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  • Madura, Jeff
  • Susnjara, Jurica

Abstract

Using a sample of 8000 targets in the US and Western Europe over the 1997–2009 period, we find that private targets receive significantly higher payments from bidders than public targets. We find that the private valuation premium is inversely related to the size of the target. We also find that the private valuation is relatively high when the target has better access to debt in its home country. Also, the private valuation premium is relatively high when the bidder country stock market is more fully developed and relatively low when the bidder has ample access to debt.

Suggested Citation

  • Madura, Jeff & Susnjara, Jurica, 2013. "The appeal of private targets in international acquisitions," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 24(C), pages 198-222.
    • Handle: RePEc:eee:intfin:v:24:y:2013:i:c:p:198-222
    DOI: 10.1016/j.intfin.2012.12.005
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    Cited by:

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    4. Shams, Syed M.M. & Gunasekarage, Abeyratna, 2016. "Operating performance following corporate acquisitions: Does the organisational form of the target matter?," Journal of Contemporary Accounting and Economics, Elsevier, vol. 12(1), pages 1-14.
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    6. Shams, Syed M.M. & Duong, Huu Nhan & Singh, Harminder, 2016. "Information content of directors' trading around acquisitions," Pacific-Basin Finance Journal, Elsevier, vol. 38(C), pages 177-193.

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    More about this item

    Keywords

    International; Mergers; Acquisitions; Private; Size; Development;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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