Corporate Restructuring: Breakups and LBOs

摘要: Abstract This chapter surveys the empirical literature on corporate breakup transactions (divestitures, spinoffs, equity carveouts, tracking stocks), leveraged recapitalizations, and buyouts (LBOs). Many are a response to excessive conglomeration reverse costly diversification discounts. The evidence shows that typical restructuring creates substantial value for shareholders. value-drivers include elimination of cross-subsidizations characterizing internal capital markets, reduction in financing costs subsidiaries through asset securitization increased divisional transparency, improved (and more focused) investment programs, agency free cash flow, implementation executive compensation schemes with greater pay-performance sensitivity, monitoring by lenders LBO sponsors. Buyouts after turn century created similar LBOs 1980s. Recent developments club deals (consortiums sponsors bidding together), fund-to-fund exits (LBO funds selling portfolio firm another fund), highly liquid (until mid-2007) loan market, persistence fund returns (perhaps because brand-sponsors borrow at better rates). Perhaps greatest challenge is achieve modicum integration analysis across transaction types. Another produce precise estimates expected return from buyout investments presence limited data those companies do not public status.