Fidrmuc, Jana P., Palandri, Alessandro, Roosenboom, P. and van Dijk, Dick (2013) When do managers seek private equity backing in public-to-private transactions? Review of Finance, Volume 17 (Number 3). pp. 1099-1139. doi:10.1093/rof/rfs021 ISSN 1572-3097.

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Abstract

Managers have the choice to take the firm private themselves in a management buyout or to seek private equity backing. We argue that managers seek private equity backing in case they are more constrained to finance the deal themselves. We confirm the hypothesis using a sample of UK public-to-private transactions over the period 1997–2003. A post going private performance analysis reveals that both management buyouts and private equity backed deals outperform their industry peers. However, private equity backed deals outperform their peers already before the deal takes place whereas management buyouts improve performance afterwards. This suggests a passive role for private equity firms in going private transactions.

Item Type:	Journal Article
Subjects:	H Social Sciences > HF Commerce
Divisions:	Faculty of Social Sciences > Warwick Business School > Finance Group Faculty of Social Sciences > Warwick Business School
Journal or Publication Title:	Review of Finance
Publisher:	Oxford University Press
ISSN:	1572-3097
Official Date:	28 July 2013
Dates:	Date Event 28 July 2013 Published
Volume:	Volume 17
Number:	Number 3
Page Range:	pp. 1099-1139
DOI:	10.1093/rof/rfs021
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access

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