Public versus private takeovers of Australian stock exchange listed targets

Martin Bugeja and Kosta Sinelnikov
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Martin Bugeja: Accounting Discipline Group, University of Technology, Sydney, Australia
Kosta Sinelnikov: Discipline of Accounting, University of Sydney, Sydney, Australia

Australian Journal of Management, 2012, vol. 37, issue 3, 391-414

Abstract: In this study we investigate the association between bidding firm listing status and the abnormal returns and characteristics of target firms, in the context of Australian takeovers. Similar to the US, target abnormal returns are significantly lower in private bids. However, this difference is only significant when comparing public bidders with private non-operating bidders suggesting the results are driven by a lack of operating synergy available to non-operating bidders rather than public bidder agency problems. We also study how target firm characteristics differ between public and private bidders. The results indicate that different private bidders have alternative motivations for making an acquisition. Private equity targets have a less independent board than targets of public bidders and are more undervalued. In comparison, targets of private bidders without existing business activities are smaller, have higher management ownership, lower growth and lower cash flows than targets of public bidders.

Keywords: Going private; mergers and acquisitions; takeovers (search for similar items in EconPapers)
JEL-codes: G30 G32 G34 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:37:y:2012:i:3:p:391-414

DOI: 10.1177/0312896212440270

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