Date of Award
Doctor of Philosophy (PhD)
Finance (Business Administration)
George M. Frankfurter
The commonly understood and traditional forms of termination for a public firm are the takeover and bankruptcy. "Going private" is a new and interesting third alternative. Once the "going public" option--a significant number of observed reverse leveraged buyout (LBO) cases--is taken into account, however, the fundamental difference between this new alternative and traditional ways becomes apparent. Even more fascinating than the "public-to-private private-to-public" move is the fact that some companies go private again. This dissertation examines the phenomenon of re-LBOs; that is, the practice of going private via management buyout, then reobtaining public status through a new initial public offering, and then going private a second time. The dissertation encompasses various dimensions that should, in addition to explaining re-LBOs, provide new evidence for existing theories of going-private transactions. First, the dissertation investigates the applicability of the leading theoretical and empirical issues of LBOS to a re-LBO sample, thus providing a comparative analysis of LBOs and re-LBOs. Specifically, it challenges the free cash flow argument of LBOS by replicating the Lehn and Poulsen (1989) study of going-private transactions with the re-LBO sample. Second, the dissertation proposes an information asymmetry hypothesis to going-private transactions. This part of the dissertation reports the results of a survey of the views of management in 600 LBOS. The results of the survey are substantiated by tests of a set of hypotheses that exploit either reverse LBO or re-LBO samples to provide additional statistical evidence on the information asymmetry issue. Although reverse LBOs have been examined in the finance literature to some degree, the use of re-LBO firms to study management buyouts is original.
Kosedag, Arman, "An Investigation of the Motives in Going-Private Transactions: The Case of Re-LBOs." (1997). LSU Historical Dissertations and Theses. 6429.