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Private Equity Program News

July 8, 2013

Research on No Shop/Go Shop featured in Wall Street Journal

When Shopping Sprees Go Wrong

Professors Charles W. Calomiris and Donna M. Hitscherich along with PhD candidate, Adonis Antoniades have completed research on the economic impact of go-shop provisions in merger agreements with private equity buyers. The authors find that go-shops are not a free option, but rather result in lower initial acquisition premia, ceteris paribus and further find no significant effect on abnormal returns from choosing a “go-shop” option.  The decision to utilize a “go-shop” is  predicted by various target firm attributes and characteristics of the target firm’s legal advisory team and sale procedures. 

The full text of the research can be found at No Free Shop: Why Target Companies in MBOs and Private Equity Transactions Sometimes Choose Not to Buy ‘Go Shop’ Options.  

The research was featured in a July 4, 2013 article in the Wall Street Journal by Ryan Dezember "When Shopping Sprees Go Wrong."