Private Equity Acquisitions and Strategic Buyers: Information Discounts versus Synergies

Christian Riis Flor, Peter Norman Sørensen

Publikation: Konferencebidrag uden forlag/tidsskriftPaperForskningpeer review

Abstrakt

We characterize when private equity funds have a competitive advantage over strategic buyers in acquiring a target firm. Taking advantage of the skill to mitigate informational frictions, private equity funds cut lossmaking projects, potentially merge the target with similarly restructured firms, and exercise growth options. Instead, a strategic buyer integrates with the target to obtain a better competitive position. The private equity fi rm is more likely to win the takeover competition when information is costlier, its required return premium is smaller, and the strategic buyer’s synergy gains are smaller. Such takeovers by private equity funds improve economic welfare.
OriginalsprogEngelsk
Publikationsdatojan. 2019
StatusUdgivet - jan. 2019
Begivenhed11th Annual Hedge Fund and Private Equity Research Conference - Paris, Frankrig
Varighed: 17. jan. 201918. jan. 2019

Konference

Konference11th Annual Hedge Fund and Private Equity Research Conference
LandFrankrig
ByParis
Periode17/01/201918/01/2019

Fingeraftryk Dyk ned i forskningsemnerne om 'Private Equity Acquisitions and Strategic Buyers: Information Discounts versus Synergies'. Sammen danner de et unikt fingeraftryk.

Citationsformater