《国际企业并购》Ch7- Global LBOs PE Buyout Funds.pptVIP

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * LBO Premiums DeAngeleo, DeAngeleo and Rice (1988) - analyzed 72 MBOs - Found average premiums above market value equal to 56% - Note: premiums were lower for later MBOs - These were early MBOs - See later graphs which show this was not the case in the 1990s and 2000s - Premium was as high as 79% when there were three or more offers - This implies that managers anticipate gains in excess of this premium All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permission of Dr. Patrick Gaughan * * LBO Research All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permission of Dr. Patrick Gaughan DeAngeleo, DeAngeleo and Rice (1988) Looked at target shareholder wealth effect of LBO proposal Two days surrounding initial LBO proposal the wealth of public shareholders increased by 22.27% Shareholder wealth decreased 8.88% after the withdrawal of the going private proposal Shareholders gain from LBO proposals Travlos Cornett (1990) showed negative correlation between shareholder returns and the P/E of the firm relative to the industry P/E Lower P/E implies more poorly managed and greater opportunities for improvement which may result in post-LBO gains * * Table 7.3. Going Private and MA Median Premiums in the United States Source: Mergerstat Review 1992, 1998 and 2005 All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permission of Dr. Patrick Gaughan * * Figure 7.7 Going Private and MA Median P/Es Offered in the United States Source: Mergerstat Review 1992, 1998 and 2005 All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permission of Dr. Patrick Gaughan * * Wealth Transfer Effects in LBOs Target shareholders, not bondholders, get to approve the deal They receive a premium (