Le rôle de la dette dans le LBO : une revue de la littérature
[Debt in LBO projects: survey of the literature]
AbstractAfter 1985, a large number of LBO projects were not able to meet their debt, like for example Federated Department Stores LBO repurchased by Campeau and Gateway LBO repurchased by Macy's. But, the conventional view of LBO transactions is that they are designed to improve the efficiency of the firm. The question raised in this paper is the following : What makes the buyout debt so advantageous ? To answer this question, we provide a survey of the theoretical and empirical literature based on two opposite sides : On the first side, debt is value enhancing (the agency theory, the tax savings theory, signal theory, and the free cash flows theory). On the other side, debt creates private value captured only by new shareholders : The shareholders' gains come from the exploitation of financial market misevaluation, from the deductibility of the debt's interests, and from rent expropriation from workers, suppliers and other corporate stakeholders (the transfer theory).
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 28708.
Date of creation: 2007
Date of revision: 2007
Publication status: Published in Euro-Mediterranean Economics and Finance Review 2.2(2007): pp. 234-253
Leverage buy out; asymétrie d�information; dette; structure de capital; free cash-�flows;
Other versions of this item:
- Ouidad Yousfi, 2007. "Le rôle de la dette dans le LBO : une revue de la littérature," EconomiX Working Papers 2007-8, University of Paris West - Nanterre la Défense, EconomiX.
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Casamatta, Catherine, 2002.
"Financing and Advising: Optimal Financial Contracts with Venture Capitalists,"
CEPR Discussion Papers
3475, C.E.P.R. Discussion Papers.
- Catherine Casamatta, 2003. "Financing and Advising: Optimal Financial Contracts with Venture Capitalists," Journal of Finance, American Finance Association, vol. 58(5), pages 2059-2086, October.
- John Easterwood & Anju Seth, 1993. "Strategic Restructuring In Large Management Buyouts," Journal of Applied Corporate Finance, Morgan Stanley, vol. 6(1), pages 25-37.
- Frank R. Lichtenberg & Donald Siegel, 1991.
"The Effects of Leveraged Buyouts on Productivity and Related Aspects of Firm Behavior,"
NBER Working Papers
3022, National Bureau of Economic Research, Inc.
- Lichtenberg, Frank R. & Siegel, Donald, 1990. "The effects of leveraged buyouts on productivity and related aspects of firm behavior," Journal of Financial Economics, Elsevier, vol. 27(1), pages 165-194, September.
- Frank R Lichtenberg & Donald Siegel, 1989. "The Effects Of Leveraged Buyouts On Productivity And Related Aspects Of Firm Behavior," Working Papers 89-5, Center for Economic Studies, U.S. Census Bureau.
- Andrei Shleifer & Lawrence H. Summers, 1989.
"Breach of Trust in Hostile Takeovers,"
NBER Working Papers
2342, National Bureau of Economic Research, Inc.
- Leland, Hayne E & Pyle, David H, 1977.
"Informational Asymmetries, Financial Structure, and Financial Intermediation,"
Journal of Finance,
American Finance Association, vol. 32(2), pages 371-87, May.
- Hayne E. Leland and David H. Pyle., 1976. "Informational Asymmetries, Financial Structure, and Financial Intermediation," Research Program in Finance Working Papers 41, University of California at Berkeley.
- Diamond, Douglas W., 1993. "Seniority and maturity of debt contracts," Journal of Financial Economics, Elsevier, vol. 33(3), pages 341-368, June.
- Servaes, Henri, 1994. "Do Takeover Targets Overinvest?," Review of Financial Studies, Society for Financial Studies, vol. 7(2), pages 253-77.
- Stulz, ReneM., 1990. "Managerial discretion and optimal financing policies," Journal of Financial Economics, Elsevier, vol. 26(1), pages 3-27, July.
- Warga, Arthur & Welch, Ivo, 1993.
"Bondholder Losses in Leveraged Buyouts,"
Review of Financial Studies,
Society for Financial Studies, vol. 6(4), pages 959-82.
- David J Ravenscraft & William F Long, 1993. "The Financial Performance of Whole Company LBOs," Working Papers 93-16, Center for Economic Studies, U.S. Census Bureau.
- Muscarella, Chris J & Vetsuypens, Michael R, 1990. " Efficiency and Organizational Structure: A Study of Reverse LBOs," Journal of Finance, American Finance Association, vol. 45(5), pages 1389-1413, December.
- Diamond, Douglas W, 1984. "Financial Intermediation and Delegated Monitoring," Review of Economic Studies, Wiley Blackwell, vol. 51(3), pages 393-414, July.
- Steven N. Kaplan, 1993.
"The Staying Power Of Leveraged Buyouts,"
Journal of Applied Corporate Finance,
Morgan Stanley, vol. 6(1), pages 15-24.
- Demsetz, Harold, 1983. "The Structure of Ownership and the Theory of the Firm," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 375-90, June.
- Bruton, Garry D. & Keels, J. Kay & Scifres, Elton L., 2002. "Corporate restructuring and performance: An agency perspective on the complete buyout cycle," Journal of Business Research, Elsevier, vol. 55(9), pages 709-724, September.
- Ippolito, Richard A & James, William H, 1992. " LBOs, Reversions and Implicit Contracts," Journal of Finance, American Finance Association, vol. 47(1), pages 139-67, March.
- Miller, Merton H, 1977. "Debt and Taxes," Journal of Finance, American Finance Association, vol. 32(2), pages 261-75, May.
- DeAngelo, Harry & DeAngelo, Linda & Rice, Edward M, 1984. "Going Private: Minority Freezeouts and Stockholder Wealth," Journal of Law and Economics, University of Chicago Press, vol. 27(2), pages 367-401, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.