City Research Online

Abstract

This study investigates six key financial measures of a global sample of 33,952 public and private companies, with annual revenues of at least US$50 million, over the period 1992-2014. We find that these six measures are statistically significant predictors of a company becoming an acquisition target. We also find that significant differences in the values of these measures affect the relative likelihood of being acquired.

According to our findings:
• Private companies are more likely to become acquisition targets if they are large, fast-growing, with high profitability, high leverage and low liquidity
• Public companies are more likely to become acquisition targets if they are small, fast-growing, with low profitability, low leverage, low liquidity and low valuations
• High leverage and large size are the two most statistically significant predictors of a private company becoming an acquisition target
• Small size and low profitability are the two most statistically significant predictors of a public company becoming an acquisition target

Publication Type:	Report
Additional Information:	© Intralinks 2016. All rights reserved.
Departments:	Bayes Business School Bayes Business School > Finance
SWORD Depositor:	Symplectic Administrator

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