Why do private acquirers pay so little compared to public acquirers?

Leonce L. Bargeron, Frederik Schlingemann (), René Stulz and Chad J. Zutter

Journal of Financial Economics, 2008, vol. 89, issue 3, 375-390

Abstract: Using 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.

Keywords: Private; equity; acquisitions; Target; abnormal; returns (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (120)

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Related works:
Working Paper: Why Do Private Acquirers Pay So Little Compared to Public Acquirers? (2007)
Working Paper: Why Do Private Acquirers Pay So Little Compared to Public Acquirers? (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:89:y:2008:i:3:p:375-390

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