The price of corporate liquidity: Acquisition discounts for unlisted targets

  title={The price of corporate liquidity: Acquisition discounts for unlisted targets},
  author={M. S. Officer},
  journal={Journal of Financial Economics},
  • M. S. Officer
  • Published 2007
  • Business
  • Journal of Financial Economics
  • This paper documents acquisition discounts for stand-alone private firms and subsidiaries of other firms (unlisted targets) of 15-30%, on average, relative to acquisition multiples for comparable publicly-traded targets. My results support the contention that acquisition discounts for unlisted targets are the price paid by private owners or corporations for the liquidity provided by the buyer. Specifically, I demonstrate that corporate parents are significantly liquidity-constrained prior to… CONTINUE READING
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