Club deals in leveraged buyouts

• 成果类型: Article
• 署名作者: Officer, Micah S.; Ozbas, Oguzhan; Sensoy, Berk A.
• 署名单位: Loyola Marymount University; University of Southern California; University System of Ohio; Ohio State University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2010.05.007
• 发表日期: 2010
• 页码: 214-240
• 关键词: Club deals; leveraged buyouts; Private equity firms

摘要

We analyze the pricing and characteristics of club deal leveraged buyouts (LBOs)-those in which two or more private equity partnerships jointly conduct an LBO. Using a comprehensive sample of completed LBOs of U.S. publicly traded targets conducted by prominent private equity firms, we find that target shareholders receive approximately 10% less of pre-bid firm equity value, or roughly 40% lower premiums, in club deals compared to sole-sponsored LBOs. This result is concentrated before 2006 and in target firms with low institutional ownership. These results are robust to controls for target and deal characteristics, including size, Q measures of risk, and time and industry fixed effects. We find little support for benign motivations for club deals based on capital constraints, diversification motives, or the ability of clubs to obtain favorable debt amounts or prices, but it is possible that the lower pricing of club deals is an inadvertent byproduct of an unobserved benign motivation for club formation. (C) 2010 Elsevier B.V. All rights reserved.