Characteristics of Firms Going Private in the Malaysian Stock Exchange

Pei Ling Lee (), Roy W. L. Khong () and Suganthi Ramasamy ()
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Pei Ling Lee: Faculty of Business and Law, Multimedia University, Malaysia
Suganthi Ramasamy: Faculty of Business and Law, Multimedia University, Malaysia

Economics Bulletin, 2010, vol. 30, issue 2, 1307-1319

Abstract: The study empirically investigates the financial characteristics that discriminate firms that went private and firms that remain publicly traded. Based on the results of logit and probit model, companies that reverted to the private domain are characterized as having higher cash balance, higher degree of undervaluation, higher operating profit margin, lower dividend payout rate, and lower free float compared to public counterparts. The classification accuracy rates for in-sample and holdout sample are 69.17% and 65.38% respectively.

Keywords: Going Private; Public-to-Private Transaction; Stock Market; Target Prediction; Firm Characteristics (search for similar items in EconPapers)
JEL-codes: G1 G3 (search for similar items in EconPapers)
Date: 2010-05-11
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