Do private acquirers pay less compared to public acquirers?

Ding Du, Mason Gerety

Research output: Contribution to journalArticle

Abstract

Because going public significantly changes bidder managerial ownership (a proxy for agency problems) but not the corporate control market in which private equity (PE) firms operate, if agency problems causally drive takeover premiums as hypothesized by Bargeron et al. (2008), deal premiums should significantly increase after PE acquirers go public. We test this prediction, and find that deal premiums are not significantly higher after PE acquirers go public. Our finding thus is inconsistent with the agency-problem hypothesis.

Original languageEnglish (US)
Pages (from-to)35-37
Number of pages3
JournalEconomics Letters
Volume164
DOIs
StatePublished - Mar 1 2018
Externally publishedYes

Keywords

  • Merger & acquisition
  • Private equity acquisitions
  • Takeover premium

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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