As part of the series of the „Finance Research Seminar“, VGSF welcomes Vesa Pursiainen from the University of St.Gallen to present his research paper.
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Paper
Retail Customer Reactions to Private Equity Acquisitions
(joint with Tereza Tykvova)
Acquisition announcements by private equity funds are associated with significant reductions in customer visits to target firm outlets. These reductions occur in primary but not in secondary buyouts. The decrease is unlikely to be due to operational changes, as it takes place at announcement and reverses following deal completion. The reversal in customer visits does not come from pre-deal customers returning, but from new customers acquired by the target business. The decrease is larger for more salient deals, for outlets facing more competition, and for less reputable private equity firms. Customer and employee reviews do not become more negative. Survey results show that consumers view private equity ownership more negatively than other ownership types.
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