Premiums in public buyouts and the impact of CSR

Sammanfattning: This study investigates the differences in premiums paid in public-to-private (PTP) transactions depending on whether the acquirer is a private equity firm or a private operating firm. The study is conducted post financial crisis, during the years 2010-2018. Using a dataset containing 373 transactions on the US market, we conclude that private equity firms on average pay lower premiums compared to their private counterparts. Furthermore, we include Corporate Social Responsibility (CSR) to add a new perspective on PTP transactions. Through a regression analysis testing CSR rating, we find that private equity firms pay lower premiums than their private counterparts. Lastly, we bring various target characteristics into the regression. By doing this, we still find private equity firms to pay lower premium for higher CSR rating.