Author Type

Graduate Student

Date of Award

2007

Document Type

Dissertation

Publication Status

Version of Record

Submission Date

October 2026

Thesis/Dissertation Advisor [Chair]

Madura, Jeff

Abstract

Takeovers of privately-held targets have outnumbered takeovers of publiclytraded targets over the years. This dissertation focuses on takeover activities of privatelyheld targets and examines several important issues which have never been touched on in the literature. The first essay examines the factors that determine the choice between a privately-held target and a publicly-traded target. After the size of the target and the prevalence of private firms in each industry in each year are controlled for, I find that the stock bidder tends to target a privately-held firm and the cash bidder tends to target a publicly-traded firm when pursuing a high-tech target. When acquiring a firm in the same industry and being inexperienced in takeover activities, the bidder is more likely to target a publicly-traded firm as opposed to a privately-held firm. The passage of the SarbanesOxley Act (SOX) also has an affect on the choice of a privately-held target or a publiclytraded target; everything else being equal, the cash bidder is more likely choose to acquire a private firm while the stock bidder is less likely to choose a private firm upon the introduction of SOX. The second essay examines the factors that influence the choice of stock versus cash payment in takeovers of privately-held targets. Stock is found to be more frequently used among takeovers in which the bidding firm has more debt and less free cash flow prior to the deal , the target is a high-tech firm, and the target management is retained in the combined entity. In addition, since the adoption of SOX, cash has been used more frequently and to greater extent among the sample of takeovers of privatelyheld targets. The third essay examines the effects of restrictions on resale of stock issued in takeovers on the bidder's wealth effect and long-run stock price performance. I find that restrictions on resale of stock are more popular among takeovers of privately-held targets as compared to takeovers of publicly-traded targets. Restrictions on resale are found to be positively related to the bidder's announcement abnormal return and negatively related to the bidder's long-run stock price performance.

Extent

209 p.

Comments

College of Business|Dissertation (Ph.D.)--Florida Atlantic University, 2007.|College of Business

Identifier

FA00000608

Format

pdf

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