The Choice of IPO versus Takeover: Empirical Evidence
James C. Brau,
Bill Francis and
Ninon Kohers
Additional contact information
James C. Brau: Brigham Young University
Bill Francis: University of South Florida
Ninon Kohers: University of South Florida
The Journal of Business, 2003, vol. 76, issue 4, 583-612
Abstract:
We examine factors that influence the choice between an initial public offering (IPO) and a takeover by a public acquirer. Our results show that the industry concentration, high-tech industry affiliation, current cost of debt, relative "hotness" of the IPO market, firm size, and insider ownership percentage are all positively related to the probability of an IPO. In contrast, private companies in high market-to-book industries, financial service sectors, highly leveraged industries, and deals involving greater liquidity for selling insiders show a stronger likelihood for takeovers. Our findings also indicate that a liquidity discount exists in takeovers relative to IPOs.
Date: 2003
References: Add references at CitEc
Citations: View citations in EconPapers (95)
Downloads: (external link)
http://dx.doi.org/10.1086/377032 main text (application/pdf)
Access to the online full text or PDF requires a subscription.
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:ucp:jnlbus:v:76:y:2003:i:4:p:583-612
Access Statistics for this article
More articles in The Journal of Business from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().