Acquisitions of private targets: the unique shareholder wealth implications
Acquisitions of privately-held targets provide unique shareholder wealth implications which prior studies have not addressed. This study provides a comparative analysis of private versus public target takeovers, including differences in merger motivations, method of payment inferences, shareholder wealth effects, and the factors driving these wealth changes. The results show that acquirer wealth gains in private target takeovers exceed those in public target takeovers, with large private targets being the key contributors to wealth gains. Acquirer gains do not appear to come at the expense of private target gains. These findings highlight the importance of target ownership in influencing the shareholder wealth changes in takeovers.