Corporate Governance Characteristics in Going-private Transactions Across the United States, the United Kingdom, and Other European Countries
The determinants of going private have been analyzed in terms of financial and market characteristics over the last years. This study aims to determine whether corporate governance can also explain the decision to go private and, if so, which factors are responsible. An overview of the delisting decision and definition of going private, followed by a summary of the determinants found in the literature and their connection to corporate governance, serves as a basis. This quantitative study uses a data set of 914 companies across the United States, United Kingdom, and other European countries between 2010 and 2019 (457 go private, and the rest are control companies). Different models study the hypothesis found in the literature and distinguish between types of transactions. The results obtained from the univariate and multivariate analysis support the information asymmetry hypothesis and find that companies that go private are young, small, and undervalued. From the financial proxies of corporate governance, only highly leveraged companies are more likely to go private. Finally, corporate governance characteristics of going-private transactions include large boards, few non-executive directors, high stock-based executive compensation, and few institutional shareholders but with a high shareholding percentage. *****The determinants of going private have been analyzed in terms of financial and market characteristics over the last years. This study aims to determine whether corporate governance can also explain the decision to go private and, if so, which factors are responsible. An overview of the delisting decision and definition of going private, followed by a summary of the determinants found in the literature and their connection to corporate governance, serves as a basis. This quantitative study uses a data set of 914 companies across the United States, United Kingdom, and other European countries between 2010 and 2019 (457 go private, and the rest are control comp