TY - JOUR
T1 - Why do private acquirers pay so little compared to public acquirers?
AU - Bargeron, Leonce L.
AU - Schlingemann, Frederik P.
AU - Stulz, René M.
AU - Zutter, Chad J.
PY - 2008/9
Y1 - 2008/9
N2 - Using the longest event window, we find that public target shareholders receive a 63% (14%) higher premium when the acquirer is a public firm rather than a private equity firm (private operating firm). The premium difference holds with the usual controls for deal and target characteristics, and it is highest (lowest) when acquisitions by private bidders are compared to acquisitions by public companies with low (high) managerial ownership. Further, the premium paid by public bidders (not private bidders) increases with target managerial and institutional ownership.
AB - Using the longest event window, we find that public target shareholders receive a 63% (14%) higher premium when the acquirer is a public firm rather than a private equity firm (private operating firm). The premium difference holds with the usual controls for deal and target characteristics, and it is highest (lowest) when acquisitions by private bidders are compared to acquisitions by public companies with low (high) managerial ownership. Further, the premium paid by public bidders (not private bidders) increases with target managerial and institutional ownership.
KW - Private equity acquisitions
KW - Target abnormal returns
UR - https://www.scopus.com/pages/publications/52049092036
UR - https://www.scopus.com/inward/citedby.url?scp=52049092036&partnerID=8YFLogxK
U2 - 10.1016/j.jfineco.2007.11.005
DO - 10.1016/j.jfineco.2007.11.005
M3 - Article
AN - SCOPUS:52049092036
SN - 0304-405X
VL - 89
SP - 375
EP - 390
JO - Journal of Financial Economics
JF - Journal of Financial Economics
IS - 3
ER -