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Public-to-Private Transactions : LBOs, MBOs, MBIs and IBOs

Listed author(s):
  • Renneboog, L.D.R.

    (Tilburg University, Center For Economic Research)

  • Simons, T.

This paper shows that a vibrant and economically important public-to-private market has reemerged in the US, UK and Continental Europe, since the second half of the 1990s.The paper shows recent trends and investigates the motives for public-to-private and LBO transactions.The reasons for the potential sources of shareholder wealth effects during the transaction period are examined: a distinction is made between tax benefits, incentive realignment, transaction costs savings, stakeholder expropriation, takeover defenses and corporate undervaluation.The paper also attempts to relate these value drivers to the post-transaction value and to the duration of the private status.Finally, the paper draws some conclusions about whether or not public-to-private transactions are useful devices for corporate restructuring.

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File URL: https://pure.uvt.nl/portal/files/775260/98.pdf
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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2005-98.

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Date of creation: 2005
Handle: RePEc:tiu:tiucen:cc5ad867-76a9-43ab-b903-39e8d7c39f69
Contact details of provider: Web page: http://center.uvt.nl

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  1. Robert F. Bruner & Kenneth M. Eades, 1992. "The Crash of the Revco Leveraged Buyout: The Hypothesis of Inadequate Capital," Financial Management, Financial Management Association, vol. 21(1), Spring.
  2. Jarrell, Gregg A & Bradley, Michael, 1980. "The Economic Effects of Federal and State Regulations of Cash Tender Offers," Journal of Law and Economics, University of Chicago Press, vol. 23(2), pages 371-407, October.
  3. Steven N. Kaplan, 1993. "The Staying Power Of Leveraged Buyouts," Journal of Applied Corporate Finance, Morgan Stanley, vol. 6(1), pages 15-24.
  4. 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.
  5. Zahra, Shaker A., 1995. "Corporate entrepreneurship and financial performance: The case of management leveraged buyouts," Journal of Business Venturing, Elsevier, vol. 10(3), pages 225-247, May.
  6. Palepu, Krishna G., 1990. "Consequences of leveraged buyouts," Journal of Financial Economics, Elsevier, vol. 27(1), pages 247-262, September.
  7. Tim C. Opler, 1992. "Operating Performance in Leveraged Buyouts: Evidence From 1985 - 1989," Financial Management, Financial Management Association, vol. 21(1), Spring.
  8. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
  9. Marais, Laurentius & Schipper, Katherine & Smith, Abbie, 1989. "Wealth effects of going private for senior securities," Journal of Financial Economics, Elsevier, vol. 23(1), pages 155-191, June.
  10. Murphy, Kevin J., 1985. "Corporate performance and managerial remuneration : An empirical analysis," Journal of Accounting and Economics, Elsevier, vol. 7(1-3), pages 11-42, April.
  11. Franks, Julian & Mayer, Colin & Renneboog, Luc, 2001. "Who Disciplines Management in Poorly Performing Companies?," Journal of Financial Intermediation, Elsevier, vol. 10(3-4), pages 209-248, July.
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