Repeated LBOs - The Case of Multiple LBO Transactions

Kosedag, A; Michayluk, D

Repeated LBOs - The Case of Multiple LBO Transactions

Kosedag, A Michayluk, D

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Publisher:: Dowling College, School of Business
Publication Type:: Journal Article
Citation:: Quarterly Journal of Business and Economics, 2004, Winter/Spring, 43 (1 & 2), pp. 111 - 122
Issue Date:: 2004-01

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Field	Value	Language
dc.contributor.author	Kosedag, A	en_US
dc.contributor.author	Michayluk, D https://orcid.org/0000-0001-9020-0855	en_US
dc.date.issued	2004-01	en_US
dc.identifier.citation	Quarterly Journal of Business and Economics, 2004, Winter/Spring, 43 (1 & 2), pp. 111 - 122	en_US
dc.identifier.issn	0747-5535	en_US
dc.identifier.uri	http://hdl.handle.net/10453/9930
dc.description.abstract	Firms that undergo a second LBO transaction are unique because they have a second experience in the capital markets after being privately held. Motivations for repeated LBOs may differ from first-time LBOs--because of the past experience, the market may be able to better distinguish the competing motivations that have been suggested in the literature. We find that for repeated LBOs, the market response is more strongly positive than that typically found for first-time LBOs. The market reaction is also strongly related to a variant of Tobin' Q, implying that the timing of the LBO may coincide with a low perception in market value. It is not surprising that the majority of the repeated LBOs were performed following the 1987 stock market crash. It appears that the instigators of the LBO believed the price was undervalued and their experience let them act accordingly.	en_US
dc.publisher	Dowling College, School of Business	en_US
dc.relation.ispartof	Quarterly Journal of Business and Economics	en_US
dc.title	Repeated LBOs - The Case of Multiple LBO Transactions	en_US
dc.type	Journal Article
utslib.citation.volume	1 & 2	en_US
utslib.citation.volume	43	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	14 Economics	en_US
utslib.citation.edition	Winter/Spring	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Finance Discipline
utslib.copyright.status	closed_access
pubs.consider-herdc	false	en_US
pubs.edition	Winter/Spring	en_US
pubs.issue	1 & 2	en_US
pubs.volume	43	en_US

Abstract:

Firms that undergo a second LBO transaction are unique because they have a second experience in the capital markets after being privately held. Motivations for repeated LBOs may differ from first-time LBOs--because of the past experience, the market may be able to better distinguish the competing motivations that have been suggested in the literature. We find that for repeated LBOs, the market response is more strongly positive than that typically found for first-time LBOs. The market reaction is also strongly related to a variant of Tobin' Q, implying that the timing of the LBO may coincide with a low perception in market value. It is not surprising that the majority of the repeated LBOs were performed following the 1987 stock market crash. It appears that the instigators of the LBO believed the price was undervalued and their experience let them act accordingly.

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http://hdl.handle.net/10453/9930