Thumbnail Image
Item

Leveraged buyouts: Motives and sources of value

Renneboog,Luc
; 
Vansteenkiste,Cara
Abstract
This paper provides an exhaustive literature review of the motives for public-to-private LBO transactions. First, the paper develops the theoretical framework for the potential sources of value creation from going private: a distinction is made between the reduction in agency costs, stakeholder wealth transfers, tax benefits, transaction costs savings, takeover defense strategies, and corporate undervaluation. The paper then reviews and summarizes whether and how these theories have been empirically verified in the four different strands of literature in LBO research. These strands of literature are categorized by phase in the LBO transaction: Intent (of a buyout), Impact (of the LBO on the various stakeholders), Process (of restructuring after the leveraged buyout) and Duration (of retaining the private status). Then, the paper shows that in the first half of the 2000s, a public-to-private LBO wave re-emerged in the US, UK and Continental Europe, whose value vastly exceeded that of the 1980s US LBO wave. Finally, the paper provides suggestions for further research
Description
Date
2017-06-27
Journal Title
Journal ISSN
Volume Title
Publisher
Collections
Tilburg University Research Output Collection
Show all metadata
Files
Thumbnail Image
109.00000017.pdf
Adobe PDF, 1.23 MB
Research Projects
Organizational Units
Journal Issue
Keywords
Public-to-private transactions, Going-private deals, Private equity, Management buyout, Leveraged buyout, Management buy-in, MBO, LBO, Reverse LBO, G3 - Corporate Finance and Governance, G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill, G34 - Mergers ; Acquisitions ; Restructuring ; Corporate Governance, G38 - Government Policy and Regulation
Citation
Renneboog, L & Vansteenkiste, C 2017, 'Leveraged buyouts : Motives and sources of value', Annals of Corporate Governance, vol. 2, no. 4, pp. 291-389. https://doi.org/10.1561/109.00000017
URI
https://hdl.handle.net/20.500.14602/66887
License
info:eu-repo/semantics/openAccess
cb
Embedded videos