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Do private equity buyouts represent value for target shareholders? Premiums in the boom of the early 2000s
Author(s)
Date Issued
2008-04
Date Available
2009-06-09T13:22:58Z
Abstract
This study compares the takeover premiums for 55 private equity buyouts with 59
takeovers involving a public acquirer, from the US takeover market between 2004 and 2007. This investigation takes place amidst accusations of anti-competitive behaviour
against some of the most active private equity groups in the US. While controlling for several other factors that might affect the takeover premium, we find weak evidence
that bid premiums are significantly lower for target firms undergoing a private equity
takeover than those subject to takeovers by public companies. We also demonstrate that
abnormal returns earned by targets around takeover announcements can be a biased and
misleading proxy for takeover premium.
Type of Material
Working Paper
Publisher
University College Dublin. School of Business. Centre for Financial Markets
Series
Centre for Financial Markets working paper series
WP-08-03
Copyright (Published Version)
2008, Centre for Financial Markets
Subject – LCSH
Private equity--United States
Tender offers (Securities)--United States
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
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