Journal of Banking & Finance Vol. 36 No. 5 2012
Acquisition valuations of withdrawn IPOs: When IPO plans turn into mergers
Abstract
We examine the acquisition valuations of withdrawn-IPOs – private targets that are acquired after they file and then withdraw their IPOs – to examine how IPO registration and withdrawal affect valuations of withdrawn-IPOs in their subsequent mergers. We find that these “almost public” withdrawn-IPOs sell at a significant acquisition premium relative to comparable pure private targets that never file IPO registration and at acquisition valuations similar to comparable public targets. The premium persists only for withdrawn-IPOs that are acquired before their IPO withdrawals after other factors are controlled for. These findings confirm that there is a significantly positive (negative) valuation impact of IPO registration (IPO withdrawal) on withdrawn-IPOs’ subsequent acquisitions. The two effects offset each other for withdrawn-IPOs that are acquired after their IPO withdrawals.
- DOI
- 10.1016/j.jbankfin.2011.12.008
- Volume
- 36
- Issue
- 5
- Pages
- 1424-1436
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref