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Pre‐Going Private Ownership Around the World
Author(s) -
Cumming Douglas,
Peter Rejo,
Sannajust Aurélie,
Tarsalewska Monika
Publication year - 2019
Publication title -
british journal of management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.407
H-Index - 108
eISSN - 1467-8551
pISSN - 1045-3172
DOI - 10.1111/1467-8551.12281
Subject(s) - shareholder , business , creditor , database transaction , agency (philosophy) , accounting , corporate governance , finance , financial system , debt , philosophy , epistemology , computer science , programming language
Going private transactions are often highly leveraged, and give rise to potential agency conflicts among existing shareholders. But who exactly are those shareholders, and under what legal conditions are these transactions more likely to occur? We examine ownership structure prior to going private transactions in 33 countries around the world from 2002 to 2014. The data indicate strong and consistent evidence that pre‐going private ownership is characterized by higher institutional and corporate ownership. Family ownership lowers the probability of a public to private transaction. Stronger creditor rights increase the probability of going private, particularly for whole company and institutional buyouts.