Publication Type
Journal Article
Version
submittedVersion
Publication Date
1-2015
Abstract
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.
Keywords
LBOs, Creditor rights, Private equity, Cross border, Club deal, Law and finance
Discipline
Finance and Financial Management
Research Areas
Finance
Publication
Journal of Banking and Finance
Volume
50
First Page
69
Last Page
80
ISSN
0378-4266
Identifier
10.1016/j.jbankfin.2014.08.027
Publisher
Elsevier
Citation
CAO, Jerry X.; CUMMING, Douglas; QIAN, Meijun; and WANG, Xiaoming.
Cross-border LBOs. (2015). Journal of Banking and Finance. 50, 69-80.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/4969
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.jbankfin.2014.08.027