The Role of Disclosure in Closing Going Private Deals.

52 Pages Posted: 1 Aug 2018 Last revised: 1 Oct 2020

See all articles by Pietro A. Bianchi

Pietro A. Bianchi

Florida International University (FIU)

Miguel Minutti-Meza

University of Miami - Department of Accounting

Matthew Phillips

University of Miami Business School

Maria Vulcheva

Florida International University

Date Written: August 12, 2020

Abstract

There is a perceived conflict of interests in going private transactions, resulting from
transferring a company’s ownership and control to affiliated parties and terminating
its public status. These deals are subject to mandatory disclosure requirements, aimed
to inform shareholders before the transaction is put to a general vote. However, the
expected incremental role of these disclosures is uncertain. We demonstrate that disclosure
volume is positively associated with the likelihood of closing a deal and with the
time between its announcement and resolution. Next, we find that disclosure volume is
positively associated with three proxies for the intensity of shareholders’ negotiations:
upward price revisions, disclosure amendments, and litigation. Our findings o↵er insights
into the incremental benefits and costs of disclosure in this setting. Increased
disclosure can facilitate the completion of going private deals, but exiting shareholders
can also use it to delay the closing date and negotiate better terms.

Keywords: Going private; disclosure; textual analysis.

JEL Classification: M41, M48, G34

Suggested Citation

Bianchi, Pietro A. and Minutti-Meza, Miguel and Phillips, Matthew and Vulcheva, Maria, The Role of Disclosure in Closing Going Private Deals. (August 12, 2020). Available at SSRN: https://ssrn.com/abstract=3223872 or http://dx.doi.org/10.2139/ssrn.3223872

Pietro A. Bianchi

Florida International University (FIU) ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

Miguel Minutti-Meza (Contact Author)

University of Miami - Department of Accounting ( email )

Coral Gables, FL 33146-6531
United States
305-284-6287 (Phone)

Matthew Phillips

University of Miami Business School ( email )

Coral Gables, FL 33146-6531
United States

Maria Vulcheva

Florida International University ( email )

11200 SW 8 Street RB244B
Miami, FL 33199
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
8
Abstract Views
211
PlumX Metrics