Undervaluation, private information, agency costs and the decision to go private
There is widespread anecdotal evidence that poor stock market performance is an important reason for taking a company private. The results support the perceived undervaluation hypothesis. The finding also applies to management buy-outs, which indicates that the management of these firms had private information. It is also found that firms going private had non-optimal governance structures, higher board and institutional ownership. The last finding is consistent with going private transactions providing institutions with a means of existing firms with poor market valuation, particularly during a time of very limited pressure from the market for corporate control.
Year of publication: |
2005
|
---|---|
Authors: | Weir, C. ; Laing, D. ; Wright, M. |
Published in: |
Applied Financial Economics. - Taylor & Francis Journals, ISSN 0960-3107. - Vol. 15.2005, 13, p. 947-961
|
Publisher: |
Taylor & Francis Journals |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Undervaluation, private information, agency costs and the decision to go private
Weir, C., (2005)
-
Weir, C., (2002)
-
Public-to-private buy-outs, distress costs and private equity
Weir, Charlie, (2008)
- More ...