The Take-Over Market for Privately Held Companies: The Us Experience

Posted: 29 Feb 2008

See all articles by James S. Ang

James S. Ang

Florida State University; Florida State University - College of Law

Ninon Kohers

University of South Florida - College of Business Administration

Date Written: November 2001

Abstract

The volume of acquisitions involving privately held firms has far surpassed that of publicly traded firms in recent years; yet this segment of the take-over market remains largely unexplored. In analysing the unique features of private target take-overs, we compare the mergers and acquisitions markets for unquoted and quoted firms on several dimensions including methods of payment, offer premiums and bidder wealth effects. Our results show that these mergers provide positive shareholder wealth benefits for bidders and relatively high premiums for privately held targets. Also, the market's reaction depends on whether it perceives the price paid for the target as too high or too low, a rational response given the sentiment at the time of the announcement.

Keywords: Mergers, Take-overs, US privately held firms

JEL Classification: G14, G34

Suggested Citation

Ang, James S. and Kohers, Ninon, The Take-Over Market for Privately Held Companies: The Us Experience (November 2001). Cambridge Journal of Economics, Vol. 25, pp. 723-748, 2001. Available at SSRN: https://ssrn.com/abstract=873651

James S. Ang (Contact Author)

Florida State University ( email )

College of Business
Tallahassee, FL 32306-1042
United States
904-644-8208 (Phone)

Florida State University - College of Law ( email )

425 W. Jefferson Street
Tallahassee, FL 32306
United States

Ninon Kohers

University of South Florida - College of Business Administration ( email )

4202 E. Fowler Avenue, BSN 3403
Dept. of Finance
Tampa, FL 33620-5500
United States
813-974-6337 (Phone)
813-974-3030 (Fax)

HOME PAGE: http://www.coba.usf.edu/departments/finance/facult

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