Do private acquirers pay less compared to public acquirers?

Ding Du and Mason Gerety

Economics Letters, 2018, vol. 164, issue C, 35-37

Abstract: Because going public significantly changes bidder managerial ownership (a proxy for agency problems) but not the corporate control market in which private equity (PE) firms operate, if agency problems causally drive takeover premiums as hypothesized by Bargeron et al. (2008), deal premiums should significantly increase after PE acquirers go public. We test this prediction, and find that deal premiums are not significantly higher after PE acquirers go public. Our finding thus is inconsistent with the agency-problem hypothesis.

Keywords: Private equity acquisitions; Takeover premium; Merger & acquisition (search for similar items in EconPapers)
JEL-codes: G30 G34 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:164:y:2018:i:c:p:35-37

DOI: 10.1016/j.econlet.2017.12.036

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