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Value creation in going private transactions

Author

Listed:
  • Pei-Ling Lee
  • Roy Wye Leong Khong
  • Suganthi Ramasamy

Abstract

The study empirically analyses the stock price reaction and the determinants of shareholder gains in going private transactions in the Malaysian stock market. A cumulative average excess return of 21.99% is documented for 61-day event period using market adjusted return model. The excess returns earned by target shareholders are attributed to free cash flow, firm size, dividend payout ratio, debt, method of payment and return on equity. The model explains 66.96% of cross-sectional variation in stock returns.

Suggested Citation

  • Pei-Ling Lee & Roy Wye Leong Khong & Suganthi Ramasamy, 2013. "Value creation in going private transactions," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 3(3), pages 274-295.
    • Handle: RePEc:ids:afasfa:v:3:y:2013:i:3:p:274-295
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