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The performance of reverse leveraged buyouts

Author Info

  • Cao, Jerry
  • Lerner, Josh

Abstract

Reverse leveraged buyouts (RLBOs) have received increased public scrutiny but attracted little systematic study. We collect a comprehensive sample of 526 RLBOs between 1981 and 2003 and examine the three-year and five-year stock performance of these offerings. RLBOs appear to perform as well as or better than other initial public offerings and the stock market as a whole, depending on the specification. Evidence exists of a deterioration of returns over time.

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File URL: http://www.sciencedirect.com/science/article/B6VBX-4V166FG-2/2/70670451b4e8b7abdc95b1fbd7c7a497
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Article provided by Elsevier in its journal Journal of Financial Economics.

Volume (Year): 91 (2009)
Issue (Month): 2 (February)
Pages: 139-157

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Handle: RePEc:eee:jfinec:v:91:y:2009:i:2:p:139-157
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505576

Keywords: Initial public offerings Private equity Exiting;

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Find related papers by JEL classification:
  • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
  • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
  • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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  7. Steven N. Kaplan, 1991. "The Staying Power of Leveraged Buyouts," NBER Working Papers 3653, National Bureau of Economic Research, Inc.
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  14. Yasushi Hamao & Frank Packer & Jay Ritter, 1998. "Institutional affiliation and the role of venture capital: evidence from initial public offerings in Japan," Research Paper 9807, Federal Reserve Bank of New York.
  15. Steven N. Kaplan & Jeremy C. Stein, 1993. "THE EVOLUTION OF BUYOUT PRICING AND FINANCIAL STRUCTURE (OR, WHAT WENT WRONG) IN THE 1980s," Journal of Applied Corporate Finance, Morgan Stanley, vol. 6(1), pages 72-88.
  16. Chou, De-Wai & Gombola, Michael & Liu, Feng-Ying, 2006. "Earnings Management and Stock Performance of Reverse Leveraged Buyouts," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 41(02), pages 407-438, June.
  17. 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.
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