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Title: The wealth effects of public-to-private LBOs: Evidence from Europe
Authors: Dasilas, Apostolos
Grose, Chris
metadata.dc.contributor.other: Grose, Chris
Type: Article
Subjects: FRASCATI::Social sciences::Economics and Business::Finance
Issue Date: Jul-2018
Source: International Review of Financial Analysis
Volume: 58
First Page: 179
Last Page: 194
Abstract: This study examines various features of leveraged public-to-private institutional buyouts in Europe that occurred between 1998 and 2016. We find significant excess returns of about 7.7% on the LBO announcement date. We also find evidence that LBOs harbored in countries with strong corporate governance mechanisms elicit greater wealth effects for shareholders of targets. Consistent with the free cash flow hypothesis, abundance of cash appears to be one of the driving forces of excess short-term returns. Looking at the characteristics of LBO targets, we show that mature companies with excess cash flows and less volatility seem to be candidates for LBO deals.
ISSN: 1057-5219
Other Identifiers: 10.1016/j.irfa.2017.10.002
Appears in Collections:Department of Applied Informatics

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