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When do managers seek private equity backing in public-to-private transactions?
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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 Financial Studies, 17 (3). pp. 1099-1139. ISSN 0893-9454 (In Press)
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Official URL: http://dx.doi.org/10.1093/rof/rfs021
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 Financial Studies |
| Publisher: | Oxford University Press |
| ISSN: | 0893-9454 |
| Date: | 28 July 2013 |
| Volume: | 17 |
| Number: | 3 |
| Page Range: | pp. 1099-1139 |
| Identification Number: | 10.1093/rof/rfs021 |
| Status: | Peer Reviewed |
| Publication Status: | In Press |
| Access rights to Published version: | Restricted or Subscription Access |
| Description: | Forthcoming |
| URI: | http://wrap.warwick.ac.uk/id/eprint/49883 |
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