On the Heterogeneity of Levered Going Private Transactions

Posted: 8 Dec 1998

See all articles by Paul Halpern

Paul Halpern

University of Toronto - Rotman School of Management

Robert L. Kieschnick

University of Texas at Dallas

Wendy Rotenberg

University of Toronto - Rotman School of Management

Abstract

In contrast to prior literature, we argue that there are two types of poorly performing firms going private through a levered buyout (LBO). One group consists of firms in which managers own an insignificant fraction of their firm?s stock and are vulnerable to a hostile takeover. The other group consists of firms in which managers own a significant fraction of their firm?s stock and so face little risk of a hostile takeover. Our evidence indicates that are two such groups of LBOs and that their motivations and post-transaction actions are different.

JEL Classification: G31, G32

Suggested Citation

Halpern, Paul J. and Kieschnick, Robert L. and Rotenberg, Wendy, On the Heterogeneity of Levered Going Private Transactions. Available at SSRN: https://ssrn.com/abstract=140411

Paul J. Halpern (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada
416-978-2825 (Phone)
416-971-3048 (Fax)

Robert L. Kieschnick

University of Texas at Dallas ( email )

800 W. Campbell Rd, SM31
Richardson, TX 75080
United States
972-883-6273 (Phone)

HOME PAGE: http://www.utdallas.edu/~rkiesch/

Wendy Rotenberg

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

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