Public-to-Private Transactions

LBOs, MBOs, MBIs and IBOs

L.D.R. Renneboog, T. Simons

Research output: Working paperDiscussion paperOther research output

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Abstract

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.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages51
Volume2005-98
Publication statusPublished - 2005

Publication series

NameCentER Discussion Paper
Volume2005-98

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Realignment
Shareholder wealth
Cost savings
Tax
Transaction costs
Wealth effect
Value drivers
Stakeholders
Corporate restructuring
Incentives
Takeover defenses
Expropriation
Undervaluation

Keywords

  • management buyouts
  • public-to-private transactions
  • going-private deals
  • leveraged buyouts
  • management buyins

Cite this

Renneboog, L. D. R., & Simons, T. (2005). Public-to-Private Transactions: LBOs, MBOs, MBIs and IBOs. (CentER Discussion Paper; Vol. 2005-98). Tilburg: Finance.
Renneboog, L.D.R. ; Simons, T. / Public-to-Private Transactions : LBOs, MBOs, MBIs and IBOs. Tilburg : Finance, 2005. (CentER Discussion Paper).
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Renneboog, LDR & Simons, T 2005 'Public-to-Private Transactions: LBOs, MBOs, MBIs and IBOs' CentER Discussion Paper, vol. 2005-98, Finance, Tilburg.

Public-to-Private Transactions : LBOs, MBOs, MBIs and IBOs. / Renneboog, L.D.R.; Simons, T.

Tilburg : Finance, 2005. (CentER Discussion Paper; Vol. 2005-98).

Research output: Working paperDiscussion paperOther research output

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N2 - 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.

AB - 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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Renneboog LDR, Simons T. Public-to-Private Transactions: LBOs, MBOs, MBIs and IBOs. Tilburg: Finance. 2005. (CentER Discussion Paper).