Private equity bids in Australia : an exploratory study

Chapple, Larelle June, Clarkson, Peter, & King, Jesse (2010) Private equity bids in Australia : an exploratory study. Accounting and Finance, 50(1), pp. 79-102.

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In this study, we provide an insight into how private equity players choose their targets and the bid arrangements they prefer. We test our expectations of the unique features of private equity targets using a sample of 23 listed private equity target firms during 2001–2007. We find, relative to a benchmark sample of 81 corporate targets matched by year and industry, the private equity target firms to be larger, more profitable, use their assets more efficiently, more highly levered and have greater cash flow. Multivariate testing indicates that private equity targets have relatively greater financial slack, greater financial stability, greater free cash flow and lower measurable growth prospects. All conclusions are found to be robust to a control sample of 502 takeover bids during 2001–2007.

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6 citations in Scopus
4 citations in Web of Science®
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ID Code: 49309
Item Type: Journal Article
Refereed: Yes
Keywords: Takeovers, Private equity, Financial slack
DOI: 10.1111/j.1467-629X.2009.00323.x
ISSN: 0810-5391
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Deposited On: 23 Mar 2012 07:01
Last Modified: 06 Jun 2012 02:46

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