Borrow Cheap, Buy High? The Determinants of Leverage and Pricing in Buyouts

• 成果类型: Article
• 署名作者: Axelson, Ulf; Jenkinson, Tim; Stromberg, Per; Weisbach, Michael S.
• 署名单位: University of London; London School Economics & Political Science; University of Oxford; Stockholm School of Economics; National Bureau of Economic Research; University System of Ohio; Ohio State University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12082
• 发表日期: 2013
• 页码: 2223-2267
• 关键词: CAPITAL STRUCTURE CHOICE; free cash flow; Financial structure; management buyouts; performance; return; FIRMS; RISK; distress; COSTS

摘要

Private equity funds pay particular attention to capital structure when executing leveraged buyouts, creating an interesting setting for examining capital structure theories. Using a large, international sample of buyouts from 1980 to 2008, we find that buyout leverage is unrelated to the cross-sectional factors, suggested by traditional capital structure theories, that drive public firm leverage. Instead, variation in economy-wide credit conditions is the main determinant of leverage in buyouts. Higher deal leverage is associated with higher transaction prices and lower buyout fund returns, suggesting that acquirers overpay when access to credit is easier.