The preferences of private equity investors in selecting target acquisitions: An international investigation

Sarah Osborne, Dean Katselas and Larelle Chapple
Additional contact information
Sarah Osborne: UQ Business School, The University of Queensland, Brisbane, Australia
Dean Katselas: School of Finance, Actuarial Studies, and Applied Statistics, The Australian National University, Canberra, Australia
Larelle Chapple: School of Accountancy, Queensland University of Technology, Brisbane, Australia

Australian Journal of Management, 2012, vol. 37, issue 3, 361-389

Abstract: This study investigates the characteristics and attributes that private equity investors prefer when selecting target acquisitions. These characteristics are examined against a matched sample of firms subject to corporate acquisitions via tender/merger offer during 2000–2009, across seven countries: Australia, Canada, the United Kingdom, the USA, France, Germany and Sweden. We show that firm-specific characteristics are more influential in target selection than external or institutional variables. In particular, private equity targets exhibit lower stock volatility and long-term growth prospects, are larger, and have greater abnormal operating income relative to tender/merger offer target firms. Further, private equity bidders exhibit ‘home bias’, implying that familiarity motivates target selection. Institutional factors remain largely insignificant across all tests.

Keywords: Acquisition techniques; economic cycles; equity home bias; legal origin; mergers; private equity; regulatory environment; tender offers (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0312896212440269 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:37:y:2012:i:3:p:361-389

DOI: 10.1177/0312896212440269

Access Statistics for this article

More articles in Australian Journal of Management from Australian School of Business
Bibliographic data for series maintained by SAGE Publications ().