Public-to-Private Transactions: LBOs, MBOs, MBIs and IBOs

L.D.R. Renneboog, T. Simons

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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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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). Finance.