63 Bus. Law. 729 (2007-2008)
Go-Shops vs. No-Shops in Private Equity Deals: Evidence and Implications; Subramanian, Guhan

handle is hein.journals/busl63 and id is 747 raw text is: Go-Shops vs. No-Shops in Private Equity
Deals: Evidence and Implications
By Guhan Subramanian*

I

Look at this. Pet Products of America is trying
to use the Holiday Catalogue to satisfy their go-shop!
From: Debevoise & Plimpton Private Equity Report (Fall 2006)
Go-shop provisions have changed the way in which private equity firms execute public-
company buyouts. While there has been considerable practitioner commentary on go-shops
over the past three years, this Article presents the first systematic empirical evidence on
the effect of this new dealmaking technology on deal pricing and deal process. Contrary to
the claims of prior commentators, I find that: (1) go-shops yield more search in aggregate
(pre- and post-signing) than the traditional no-shop route; (2) pure go-shop deals, in which
there is no pre-signing canvass of the marketplace, yield a higher bidder 17 percent of the
time; and (3) target shareholders receive approximately 5 percent higher returns through
* Joseph Flom Professor of Law and Business, Harvard Law School; Douglas Weaver Professor of
Business Law, Harvard Business School. Comments welcome at gsubramanian@hbs.edu. I thank Lucian
Bebchuk, David Bernstein, John Coates, Larry Hamermesh, Victoria lvashina, Hon. Jack Jacobs, Hon.
Leo Strine, David Walker, and seminar participants at Harvard Law School, Harvard Business School,
and New York University School of Law for comments on earlier drafts; Ranjan Ahuja and Rebecca Mata
for excellent research assistance; Mark Morton, Esq., and Roxanne L. Houtman, Esq., of Potter, Ander-
son & Corroon LLP for access to their data on go-shops; and the Olin Foundation at the Harvard Law
School and the Division of Research at the Harvard Business School for generous funding.

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