Factors Influencing the Final Status of LBOs

• Main Authors: Chun-Wei Tien, 田鈞緯
• Other Authors: 邱顯比
• Format: Others
• Language: en_US
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/14838454584547391265

碩士 === 國立臺灣大學 === 財務金融學研究所 === 100 === This study examines the relation between the final status of global leveraged buyouts (LBOs) and the characteristics of target firms and transactions from 1986 to 2010 by binary logistic regression analysis. The empirical results indicate that target firms with higher debt capacity and lower market-to-book-value ratio and involvement of LBO professional associations significantly enhance the probability of subsequent completion. A significantly negative relationship was also found between hostile takeover and the final completeness of LBOs. This study also examines the ability of the market in predicting the final status of LBOs. The results reveal that there are large significantly positive cumulative abnormal returns for target firms’ shareholders after the announcements and we find that capital markets have the ability to predict the final status of LBOs after one week from the announcements.