Do private equity buyouts represent value for target shareholders? Premiums in the boom of the early 2000s

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Title: Do private equity buyouts represent value for target shareholders? Premiums in the boom of the early 2000s
Authors: Hutson, Elaine
Mahony, Darragh
Permanent link: http://hdl.handle.net/10197/1153
Date: Apr-2008
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
Copyright (published version): 2008, Centre for Financial Markets
Subject LCSH: Private equity--United States
Tender offers (Securities)--United States
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Centre for Financial Markets Working Papers

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