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Dissertation
Three essays on going-private transactions
Doctor of Philosophy (Ph.D.), Drexel University
Jun 2001
DOI:
https://doi.org/10.17918/00000615
Abstract
An increasing number of publicly traded corporations have "gone private" during the past several years, and shareholders have reaped large gains in these transactions. However, the source of these gains remains puzzling. After going private through leveraged, some of these firms seek to unleveraged themselves. The question then arises as to why these firms go public or sell themselves to third parties, often within a year or two of the initial leveraged buyout. In this thesis, three essays related to going-private transactions will be addressed in different perspectives. The first essay explains the valuation effect generated by going-private announcements; in particular distinguishing between two hypotheses: reduction of agency cost and information asymmetry. In addition, both current-year and five-year earnings forecast revisions surrounding going-private announcements are examined to see whether there is potential information signaling to industry rivals from firms making going-private announcements. The second essay examines whether there is asymmetric information between outsiders and insiders when those firms that had gone private go public again. In particular, a test is implemented to see whether there is earnings manipulation during the time of reverse LBOs when management or leveraged buyout specialists are involved. Moreover, the mispricing issue for reverse LBOs is also examined. Do reverse LBOs generate unusually significant positive returns as IPOs do? The third essay will focus on the long-run stock performances of reverse LBO firms. It has been well documented that, from the closing price on the first day of public trading to their three anniversaries IPOs underperform a sample of matching firms. Do reverse LBOs and IPOs share the same fate, or not?
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Details
- Title
- Three essays on going-private transactions
- Creators
- De-Wai Chou
- Contributors
- Jeremy Goh (Advisor)
- Awarding Institution
- Drexel University
- Degree Awarded
- Doctor of Philosophy (Ph.D.)
- Publisher
- Drexel University; Philadelphia, Pennsylvania
- Number of pages
- xi, 109 pages
- Resource Type
- Dissertation
- Language
- English
- Academic Unit
- Bennett S. LeBow College of Business; Finance; Drexel University
- Other Identifier
- 991014970337804721