The impact of investor protection law on global takeovers: LBO vs. non-LBO transactions

The impact of investor protection law on global takeovers: LBO vs. non-LBO transactions

This paper examines the impact of investor protection laws on value creation in LBOs versus non-LBO takeovers. We find that value creation measured by takeover premium is significantly higher in countries with better investor protection. The value effect of investor protection laws is more pronounce...

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Bibliographic Details
Main Authors: CAO, Xiaping, CUMMINGS, Douglas, GOH, Jeremy C., WANG, Xiaoming
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2020
Subjects:
Leveraged buyouts
Legal environment
Law
Premium
Shareholder rights
Club deals
Value effect
Investor protection
Corporate Finance
Finance and Financial Management
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/6683
https://ink.library.smu.edu.sg/context/lkcsb_research/article/7682/viewcontent/Impact_investor_protection_law_LBO_2019_av.pdf
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Institution: Singapore Management University
Language: English
Description
Summary:This paper examines the impact of investor protection laws on value creation in LBOs versus non-LBO takeovers. We find that value creation measured by takeover premium is significantly higher in countries with better investor protection. The value effect of investor protection laws is more pronounced for LBOs than non-LBO takeover transactions. Among LBOs, investor protection’s value effect is lower for club deals than others. These results suggest that institutional context and legal environment determine the extent of value creation for takeovers around the world.

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