Determinants of Public-to-Private Transactions: Evidence from the London Stock Exchange

Abstract

The research goal is to establish the relationship between analyst following, insider ownership and the probability of a company being taken private. In order to meet the research goal the following objectives were set: (1) Conduct a critical review of relevant literature on the topic (2) Classify the determinants of public-to-private transactions (3) Conduct an empirical study aimed at establishing the relationship between analyst following, insider ownership on the probability of a firm being taken private for UK-listed firms (4) Analyze the results, make conclusions and suggest possible managerial implications of the results The empirical study showed that companies followed by fewer research analysts as well as those having lower insider ownership are more likely to be taken private in an institutional or management buyout.