CAMPEAUS ACQUISITION OF FEDERATED - POST-BANKRUPTCY RESULTS

• 成果类型: Article
• 署名作者: KAPLAN, SN
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/0304-405X(94)90020-5
• 发表日期: 1994
• 页码: 123-136
• 关键词: bankruptcy; Financial distress; merger; acquisition; leverage

摘要

This paper updates Kaplan (1989) by comparing Federated Department Stores' value before its purchase by Campeau Corporation to its post-bankruptcy value. The post-bankruptcy value includes all direct and indirect costs of bankruptcy and financial distress. Federated's assets increased in value by $3.1 billion in 1992 dollars (or $1.6 billion in 1987 dollars). This increase is only slightly below that in Kaplan (1989), suggesting that net bankruptcy costs were modest, and, possibly, nonexistent. The Federated purchase illustrates that a highly-leveraged transaction can increase value, but still be unable to meet its debt obligations; and bankruptcy (and financial distress) need not be costly.