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Do Unlisted Targets Sell at Discounts?

  • Jeffrey F. Jaffe, Jan Jindra, David J. Pedersen and Torben Voetmann


Academic literature, practitioners, courts, and regulators routinely assert that both private and subsidiary targets sell at discounts relative to public targets. However, the empirical evidence to support this conclusion is thin. Our work alters the methodology from prior research to avoid biases due to both one-sided sample truncation and Jensen’s inequality. Following these changes, we find no evidence that unlisted targets sell at discounts. Our results hold under a number of different approaches and after controlling for known determinants of acquisition pricing.


Corresponding author

*Jaffe,, University of Pennsylvania, the Wharton School; Jindra,, U.S. Securities and Exchange Commission; Pedersen (corresponding author),, Rutgers School of Business–Camden; and Voetmann,, University of San Francisco and The Brattle Group. We thank an anonymous referee and Paul Malatesta (the editor) for helpful comments that improved the paper.


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We also thank Micah Officer for his detailed and thoughtful comments and suggestions on an earlier version of this paper. Additionally, we thank Audra Boone, Natasha Burns, Jean Helwege, John McConnell, Rene Stulz, Ralph Walkling, and seminar participants at Drexel University, Rutgers University, and the U.S. Securities and Exchange Commission (SEC) for helpful comments and discussions. Gerard Hoberg graciously shared with us the financial constraint data from Hoberg and Maksimovic (2015). Pedersen acknowledges partial financial support from the David Whitcomb Center for Research in Financial Services of Rutgers University. The SEC, as a matter of policy, disclaims responsibility for any private publication or statement by any of its employees. The views expressed herein are those of the authors and do not necessarily reflect the views of the SEC or of the authors’ colleagues upon the staff of the SEC. The views expressed in this article are solely those of the authors, who are responsible for the content, and do not necessarily represent the views of The Brattle Group.



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Do Unlisted Targets Sell at Discounts?

  • Jeffrey F. Jaffe, Jan Jindra, David J. Pedersen and Torben Voetmann


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