The Role of Institutional Investors in Public-to-Private Transactions

40 Pages Posted: 21 Feb 2013

See all articles by Emanuele Bajo

Emanuele Bajo

University of Bologna - Department of Management

Massimiliano Barbi

University of Bologna - Department of Management

Marco Bigelli

University of Bologna - Department of Management

David Hillier

University of Strathclyde - Department of Accounting and Finance

Multiple version iconThere are 2 versions of this paper

Date Written: February 07, 2013

Abstract

In Italy, as in many other European countries, listed firms have gone dark through controlling shareholder-initiated tender offers. We find that the presence of institutional investors, especially when foreign, helps minority shareholders receive a higher takeover premium and reduces the likelihood of a successful bid. We explore the effect of a number of hitherto unexplored factors on the takeover premium and find that shareholder agreements facilitate the public-to-private acquisition. Other factors, such as a threat to merge the target if the bid fails or external validation of the offer price have no impact on either the likelihood of delisting or the premium paid by the bidder.

Keywords: Public-to-private transactions, delisting, family firms, tender offer

JEL Classification: G32, G34

Suggested Citation

Bajo, Emanuele and Barbi, Massimiliano and Bigelli, Marco and Hillier, David, The Role of Institutional Investors in Public-to-Private Transactions (February 07, 2013). ECGI - Finance Working Paper No. 350. Available at SSRN: https://ssrn.com/abstract=2221420 or http://dx.doi.org/10.2139/ssrn.2221420

Emanuele Bajo

University of Bologna - Department of Management ( email )

Via Capo di lucca, 34
Bologna, 40126
Italy
+39 051 209 8091 (Phone)
+39 051 246411 (Fax)

Massimiliano Barbi

University of Bologna - Department of Management ( email )

via Capo di Lucca 34
Bologna, 40126
Italy
+39 051 2098404 (Phone)
+39 051 246411 (Fax)

HOME PAGE: http://www.sites.google.com/site/massimilianobarbifinance/

Marco Bigelli (Contact Author)

University of Bologna - Department of Management ( email )

Via Capo di Lucca 34
Bologna, 40126
Italy
+39 051 2098060 (Phone)
+39 051 6390612 (Fax)

David Hillier

University of Strathclyde - Department of Accounting and Finance ( email )

Curran Building
100 Cathedral Street
Glasgow G4 0LN
United Kingdom
44 0141 330 4809 (Phone)
44 0141 330 4442 (Fax)

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