Voluntary Delisting? A Valid Option for Firms Restructuring

40 Pages Posted: 18 Sep 2011

See all articles by Renato Giovannini

Renato Giovannini

Guglielmo Marconi University - Department of Economics and Management; SDA Bocconi

Stefano Caselli

Bocconi University - Department of Finance

Vincenzo Capizzi

University of Piemonte Orientale - Department of Economics and Business Studies; SDA Bocconi School of Management

Valerio Pesic

University of Rome I - Department of Management

Date Written: September 16, 2011

Abstract

Analysing a comprehensive dataset of European going private deals during the period 1998-2007, we explore the post-transaction operating performance of companies gone private and potential variables that can explain this choice. We find these firms’ situations improved slightly before going private, even if the most relevant and significant benefits on operating performance appear in the short and medium term. We show that the presence of a private equity provider appears to positively affect long-term performance, especially when the target company is large and needs to embark on a complex restructuring process. We further analyse restructuring, providing some evidence that, for companies with complex turnaround plans, going private is a valid option for implementing their strategies more effectively away from the public eye. In particular, we also show that this is particularly relevant for smaller public firms that cannot afford to undertake such a process without the whole support of the market. Finally, we do not find any evidence that size is, per se, a factor that has any structural impact on post-deal performance.

Keywords: Delisting, operating performance, private equity, restructuring

JEL Classification: G32, G34

Suggested Citation

Giovannini, Renato and Caselli, Stefano and Capizzi, Vincenzo and Pesic, Valerio, Voluntary Delisting? A Valid Option for Firms Restructuring (September 16, 2011). Midwest Finance Association 2012 Annual Meetings Paper. Available at SSRN: https://ssrn.com/abstract=1928851 or http://dx.doi.org/10.2139/ssrn.1928851

Renato Giovannini (Contact Author)

Guglielmo Marconi University - Department of Economics and Management ( email )

Via Plinio, 44
Rome, 00193
Italy

SDA Bocconi ( email )

Via Bocconi, 8
milan, 20137
Italy

Stefano Caselli

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

Vincenzo Capizzi

University of Piemonte Orientale - Department of Economics and Business Studies ( email )

Via E. Perrone, 18
Novara, NO 28100
Italy
+390321375438 (Phone)
+390321375405 (Fax)

HOME PAGE: http://www.uniupo.it

SDA Bocconi School of Management ( email )

Via F. Bocconi, 8
Milan, Milan 20136
Italy
+390258365966 (Phone)
+390258366893 (Fax)

HOME PAGE: http://www.sdabocconi.it

Valerio Pesic

University of Rome I - Department of Management ( email )

Via del Castro Laurenziano, 9
Rome, 00161
Italy

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