Skip to main content

Research Repository

See what's under the surface

Irrevocable commitments, going private and private equity.

Wright, Mike; Weir, Charlie; Burrows, Andrew

Authors

Mike Wright

Charlie Weir

Andrew Burrows



Abstract

This paper adds to growing interest in public to private buy-outs and mechanisms to ensure bid success. Using a unique, hand-collected dataset of 155 public to private buy-outs we provide one of the first examinations of the determinants of irrevocable commitments. Irrevocable commitments involve undertakings given by existing shareholders to agree to sell their shares to the bidder before the bid to take the company private is announced. We find that, for management buy-outs, the level of irrevocable commitments is increased by the bid premium, the reputation of the private equity backer and board shareholdings. The level of irrevocable commitments is reduced by rumours of a takeover bid and bid value. We therefore find evidence that management and private equity firms' activity prior to the bid's announcement can have an important impact on the process of going private.

Journal Article Type Article
Publication Date Sep 1, 2007
Journal European financial management
Print ISSN 1354-7798
Electronic ISSN 1468-036X
Publisher Wiley Open Access
Peer Reviewed Peer Reviewed
Volume 13
Issue 4
Pages 757-775
Institution Citation WRIGHT, M., WEIR, C. and BURROWS, A. 2007. Irrevocable commitments, going private and private equity. European financial management [online], 13(4), pages 757-775. Available from: https://doi.org/10.1111/j.1468-036X.2007.00382.x
DOI https://doi.org/10.1111/j.1468-036X.2007.00382.x
Keywords Public to private buyouts; Irrevocable commitments; Takeovers

Files







Downloadable Citations