Why do publicly listed firms go private in Europe?

• Autor(a) principal: Lapa, Sofia Henriques da Silva
• Data de Publicação: 2020
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/31322
• topic: Going private; Survival analysis; Mergers; Acquisitions; Saída da bolsa; Análise de sobrevivência; Fusões; Aquisições; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

The literature on the going private (GP) decision in Europe often studies the determinants of public to private transactions in one specific or a small number of countries. Studies elaborate on different firm-specific factors, although frequently neglecting the importance of the macro environment. Additionally, the logit analysis is the primary statistical tool of analysis exploited. This study examines the determinants of the GP decision in Europe by performing univariate, logit and survival analyses. The Cox Proportional-Hazard Model is used to consider the impact of time-varying firm-specific and macro environment characteristics, as well as the duration of public life, on the likelihood of a firm going private. A sample of 1,735 firms from 39 different European countries, which went private between 1985 and 2020, is contrasted to 5,684 companies that remain publicly listed in Europe. Results suggest GP firms to be smaller and undervalued, have lower stock liquidity, larger leverage and to have experienced lower abnormal returns than companies that remain public. Evidence highlights European markets to be more fit for large companies and that GP firms may need a capital restructuring. Furthermore, it also indicates benefits of liquidity and having a price which captures the value of the company to be decisive for publicly listed firms. Moreover, strong evidence is found of the importance of the macro environment, such as the existence of alternative sources of financing. Finally, country-specific characteristics affect the determinants of the decision to go private in Europe.