Cross-border LBOs

Cross-border LBOs

This paper examines the relation between legal conditions and leveraged buyouts (LBOs) in 49 countries. The data indicate that sophisticated PE fund managers carrying out large international LBOs can only partially mitigate costs associated with inefficient legal protections. LBOs are more active in...

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Bibliographic Details
Main Authors: CAO, Jerry X., CUMMING, Douglas, QIAN, Meijun, WANG, Xiaoming
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2015
Subjects:
LBOs
Creditor rights
Private equity
Cross border
Club deal
Law and finance
Finance and Financial Management
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/4969
https://ink.library.smu.edu.sg/context/lkcsb_research/article/5968/viewcontent/SSRN_id1086775.pdf
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Institution: Singapore Management University
Language: English
Description
Summary:This paper examines the relation between legal conditions and leveraged buyouts (LBOs) in 49 countries. The data indicate that sophisticated PE fund managers carrying out large international LBOs can only partially mitigate costs associated with inefficient legal protections. LBOs are more active in countries with strong creditor rights. Club deals are more likely to occur in countries with weak creditor rights. Cross-border LBO investment is more common from strong creditor rights countries to weak creditor rights countries. Premiums offered to shareholders are on average negatively correlated with creditor rights for both domestic and cross-border LBOs.

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