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Author: | Draper, P. Paudyal, K. |
Title: | Acquisitions: Private versus public |
Journal: | European Financial Management
2006 : JAN, VOL. 12:1, p. 57-80 |
Index terms: | companies consolidation mergers rate of return shareholders risk United Kingdom |
Language: | eng |
Abstract: | Privately held companies' takeovers represent more than 80 percent of all takeovers (hereafter as: t-ovs.). Despite their significance, studies of such t-ovs. with their impact on the wealth of shareholders (here as: s-hldr/s.) are rare. Using a very large sample of listed and privately held U.K. targets, this paper examines the impact of such t-ovs. on the risk adjusted return of listed U.K. acquirers from 1981 to 2001. The much quoted conclusion, derived from the experiences of listed firm bidders that the s-hldrs. of acquiring firms fail to gain from takeovers, cannot be generalised. Acquiring a privately held company is an attractive option for maximising s-hldr. wealth. |
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