Munich Personal RePEc Archive

Asset sales and the role of buyers: strategic buyers versus private equity

Hege, Ulrich and Lovo, Stefano and Slovin, Myron B. and Sushka, Marie E. (2009): Asset sales and the role of buyers: strategic buyers versus private equity.

[img]
Preview
PDF
MPRA_paper_39549.pdf

Download (327Kb) | Preview

Abstract

We model bidding behavior and the interaction of private equity and strategic buyers in corporate asset sales. Private equity bidding and in turn seller gains, and type and time of exit, are determined by private equity's ability to enhance the asset's value. Our empirical results show excess returns to sellers are greater for sales to private equity than strategic buyers. Seller gains in private equity deals are related to subsequent increases in asset values and type and time of exit. Value increases during private equity ownership significantly exceed those of benchmark firms.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.