Strategic Finance

“Public-to-private deals (PTP) have been turning out to be increasingly popular transactions in the last decade. I constructed a sample of 629 PTP deals from North America and Europe over the period 2001-2013. In studying the premiums paid in public-to-private deals (PTP), I find that premiums are in average 16% higher in North America than in Europe, that the deal size (below and above €500 million) is a significant determinant of the premium and that acquirers pay a “fair” price when compared to matched peers (by using M/B and EV/EBITDA ratios) in North America but that they are paying more than this “fair” price in the case of a European target. I also find out that the premiums paid to acquire a public company are significantly increasing since the financial crisis (while at the same time the targets’ undervaluation are decreasing, which questions the fact that a “hot credit” market leads to higher price paid. This remark is especially true when considering the extremely weak credit market in Europe since the crisis and putting it in comparison of the higher increase of the premiums paid in European transactions since 2008.”

Megaproject Planning and Management: Essential Readings contains the seminal articles from the growing body of research on megaproject planning and management along with an original introduction by the editor, Bent Flyvbjerg. The leading and most cited authority in the field, Flyvbjerg has used crowdsourcing and 25 years of experience to cherry-pick from several hundred articles and books the writings that define the field. This volume will be an indispensable source for those wishing to speak with authority about how megaprojects are prepared, delivered, and fought over. The target audience is students, academics, practitioners, and media pundits alike, as well as communities affected by megaprojects.

This article presents results from the first statistically significant study of cost escalation in transportation infrastructure projects. Based on a sample of 258 transportation infrastructure projects worth US$90 billion and representing different project types, geographical regions, and historical periods, it is found with overwhelming statistical significance that the cost estimates used to decide whether such projects should be built are highly and systematically misleading. Underestimation cannot be explained by error and is best explained by strategic misrepresentation, that is, lying. The policy implications are clear: legislators, administrators, investors, media representatives, and members of the public who value honest numbers should not trust cost estimates and cost-benefit analyses produced by project promoters and their analysts.

During World War I, the US Congress made it unlawful to speak against the war. The executive prosecuted many for doing so and when tried at the Supreme Court it upheld the sentences. During the Iraq War it was not a crime to speak against the war, but it was almost impossible to be heard if you had anything critical to say. Mass media practiced a self-imposed censorship. The op-ed below was written a few days after the invasion of Iraq and sent to main media in the US, but none wanted to print it on the grounds that critique of the war was considered untimely.