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From Greed to Good? - A Study on the Long-Run Stock Performance of Reverse Leveraged Buyouts on the American Stock Exchanges

Antonsson, Jesper LU and Palmér, Marcus (2012) FEKN90 20121
Department of Business Administration
Abstract
The study seeks to investigate long-term stock performance of
RLBOs. The purpose also to investigate long-term performance
differences across RLBOs by examining whether certain
characteristics can be attributed to deviations in performance. In
general, the study seeks to shed some light on the recent wave of
leveraged buyout transactions.
This study is to our knowledge based on the largest and hitherto
most up-to-date sample of US RLBOs with return data. In total we
have a dataset of 448 US RLBOs and 7804 non-buyout-backed
benchmark IPOs during 1981-2007 with stock return data ending
March 2012.
In the whole sample analysis, RLBOs show superior performance
relative to other IPOs. However, performance seems to deteriorate
over... (More)
The study seeks to investigate long-term stock performance of
RLBOs. The purpose also to investigate long-term performance
differences across RLBOs by examining whether certain
characteristics can be attributed to deviations in performance. In
general, the study seeks to shed some light on the recent wave of
leveraged buyout transactions.
This study is to our knowledge based on the largest and hitherto
most up-to-date sample of US RLBOs with return data. In total we
have a dataset of 448 US RLBOs and 7804 non-buyout-backed
benchmark IPOs during 1981-2007 with stock return data ending
March 2012.
In the whole sample analysis, RLBOs show superior performance
relative to other IPOs. However, performance seems to deteriorate
over time:
- RLBOs that floated the years of 1981-1995 outperformed nonbuyout-
backed IPOs and the market significantly.
- RLBOs between 1996 and 2003 still outperformed non-buyoutbacked
IPOs but they did not outperform the market.
- RLBOs that floated between 2004 and 2007 show no
significant outperformance to other IPOs. Nor do they however,
show any significant underperformance.
Cross-sectionally, two conclusions emerge in particular: (1) Publicto-
private RLBOs that floated between the years 2004-2007,
perform significantly better than other RLBOs, and (2) quick-flip
RLBOs significantly underperform throughout the whole sample. (Less)
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author
Antonsson, Jesper LU and Palmér, Marcus
supervisor
organization
course
FEKN90 20121
year
type
H1 - Master's Degree (One Year)
subject
keywords
Reverse Leveraged Buyout (RLBO), Private Equity (PE), Initial Public Offering (IPO), Leveraged Buyout (LBO), Long-Run Stock Performance
language
English
id
2542619
date added to LUP
2012-06-19 13:46:39
date last changed
2012-06-19 13:46:39
@misc{2542619,
  abstract     = {The study seeks to investigate long-term stock performance of
RLBOs. The purpose also to investigate long-term performance
differences across RLBOs by examining whether certain
characteristics can be attributed to deviations in performance. In
general, the study seeks to shed some light on the recent wave of
leveraged buyout transactions. 
This study is to our knowledge based on the largest and hitherto
most up-to-date sample of US RLBOs with return data. In total we
have a dataset of 448 US RLBOs and 7804 non-buyout-backed
benchmark IPOs during 1981-2007 with stock return data ending
March 2012.
In the whole sample analysis, RLBOs show superior performance
relative to other IPOs. However, performance seems to deteriorate
over time:
- RLBOs that floated the years of 1981-1995 outperformed nonbuyout-
backed IPOs and the market significantly.
- RLBOs between 1996 and 2003 still outperformed non-buyoutbacked
IPOs but they did not outperform the market.
- RLBOs that floated between 2004 and 2007 show no
significant outperformance to other IPOs. Nor do they however,
show any significant underperformance.
Cross-sectionally, two conclusions emerge in particular: (1) Publicto-
private RLBOs that floated between the years 2004-2007,
perform significantly better than other RLBOs, and (2) quick-flip
RLBOs significantly underperform throughout the whole sample.},
  author       = {Antonsson, Jesper and Palmér, Marcus},
  keyword      = {Reverse Leveraged Buyout (RLBO),Private Equity (PE),Initial Public Offering (IPO),Leveraged Buyout (LBO),Long-Run Stock Performance},
  language     = {eng},
  note         = {Student Paper},
  title        = {From Greed to Good? - A Study on the Long-Run Stock Performance of Reverse Leveraged Buyouts on the American Stock Exchanges},
  year         = {2012},
}