Going Private and Going Dark Strategies: Literature Review and Directions for Future Research

Tiziano Onesti, Mauro Romano, Christian Favino, Valerio Pieri
2013 Social Science Research Network  
Corporate delistings can be related to a wide variety of circumstances and operations (going private transactions, going dark strategies, mergers, buyouts, involuntary delistings, etc.), representing a very complex and highly differentiated phenomenon, whose relevance has recently increased as one of the many effects of the ongoing global financial crisis. In this paper, on the basis of a systematic review of the existing international literature, we give reasons for the need for a wider and
more » ... for a wider and deeper theoretical framework for corporate delistings, which we consider to be an essential premise for the conduction of further studies on corporate governance changes and the dynamics of corporate value associated with going-private and going-dark strategies. We provide a possible classification of corporate delistings that deepens the fundamental distinction between voluntary and involuntary delistings. A particular focus is on voluntary delistings, which we differentiate in the light of three main characterising aspects: the subjects who pursue delisting, the strategic context and the operating conditions of the delisted company. We define some uniform areas of observation, which may represent a useful framework for future deeper studies concerning corporate delistings (presale delistings, hidden potential delistings, control strengthening delistings and takeover delistings, either in balanced operating conditions or in presence of crisis/operating distress). JEL codes: M10, M40 and G34 This occurrence-which, as will be explained below, can be the result of a voluntary choice or can represent the consequence of failing to meet listing requirementssignificantly influences corporate strategies, even though it is a widespread opinion that delisting is in many cases connected to the relaxation of advisory transparency restrictions and strictness of the corporate governance rules and the corporate auditing system. On further inspection, delisting is a complex and strongly differentiated phenomenon; the cessation of listing can, in fact, be connected to a variety of very wide circumstances and ________________
doi:10.2139/ssrn.2366485 fatcat:khuec2kyyjhwjg2m3hc7awlcz4