Date
2010
Indexation documentaire
Economie financière
Subject
Private Equity; Acquisitions; Acquirer Returns; Unlisted Targets
Code JEL
G34; G24
Titre du colloque
2010 FMA Annual Meeting
Date du colloque
10-2010
Ville du colloque
New York
Pays du colloque
États-Unis
Type
Communication / Conférence
Nombre de pages du document
34
Résumé en français
Using a sample of acquisitions of unlisted firms completed by public companies from 17 Western European countries over the period 2003-2008, this study investigates whether
private equity (PE)-backing of acquired firms has an impact on announcement period
abnormal returns to acquirers. 12.5% of the unlisted targets are PE-backed. Acquisitions of
PE-backed firms are more likely to involve larger acquirers, larger targets relative to acquirer size, and high-tech targets; they are more likely to occur in an unrelated industry and to be partially stock-financed. Of most importance for this study, I find that the presence of PE investors in the targets leads to significantly lower acquirer announcement returns. This effect remains after controlling for a large set of deal and acquirer characteristics. Moreover, these results are robust to the use of a propensity score matching method on multiple deal characteristics and suggest that PE investors increase the negotiating power of target shareholders.