TY  - JOUR
AU  - Stuart,Toby
AU  - Yim,Soojin
TI  - Board Interlocks and the Propensity to be Targeted in Private Equity Transactions
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14189
PY  - 2008
Y2  - July 2008
UR  - http://www.nber.org/papers/w14189
L1  - http://www.nber.org/papers/w14189.pdf
N1  - Author contact info:
Toby Stuart
Harvard Business School
Rock 211
Soldiers Field
Boston, MA 02163
E-Mail: tstuart@hbs.edu

Soojin Yim
Harvard Business School
Baker 220
Soldiers Field
Boston, MA 02163
E-Mail: yim@post.harvard.edu
M3  - presented at "New World of Private Equity Conference", April 4-5, 2008
AB  - In this paper, we examine the propensity for U.S. public companies to become targets for private equity-backed, take-private transactions. We consider the characteristics of 483 private equity-backed deals in the 2000-2007 period relative to public companies, and find that, in addition to the financial drivers studied in previous works, board characteristics and director networks are also associated with deal generation. We find that a company that has a director who has had LBO experience through prior board service is ~40% more likely to receive a private equity offer, and that the strength of this effect varies with the influence of the director and the quality of the prior LBO experience. This effect is robust to the most likely alternative explanations and supports the idea that directors and social networks play an influential role in change-of-control transactions.
ER  -