EconPapers    
Economics at your fingertips  
 

Leverage and Pricing in Buyouts: An Empirical Analysis

Ulf Axelson, Tim Jenkinson, Per Strömberg and Michael Weisbach

OFRC Working Papers Series from Oxford Financial Research Centre

Abstract: This paper provides an empirical analysis of the financial structure of large recent buyouts. We collect detailed information of the financings of 153 large buyouts (averaging over $1 billion in enterprise value). We document the manner in which these important transactions are financed. Buyout leverage is cross-sectionally unrelated to the leverage of matched public firms, and is largely driven by other factors than what explains leverage in public firms. In particular, the economy-wide cost of borrowing seems to drive leverage. Prices paid in buyouts are related to the prices observed for matched firms in the public market, but are also strongly affected by the economy-wide cost of borrowing. These results are consistent with a view in which the availability of financing impacts booms and busts in the private equity market.

Keywords: Private equity; capital structure; buyouts (search for similar items in EconPapers)
Pages: 45
Date: 2008
New Economics Papers: this item is included in nep-fmk
References: Add references at CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.finance.ox.ac.uk/file_links/finecon_papers/2008fe20.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.finance.ox.ac.uk:80 (No such host is known. )

Related works:
Working Paper: Leverage and Pricing in Buyouts: An Empirical Analysis (2008) Downloads
Working Paper: Leverage and Pricing in Buyouts: An Empirical Analysis (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sbs:wpsefe:2008fe20

Access Statistics for this paper

More papers in OFRC Working Papers Series from Oxford Financial Research Centre Contact information at EDIRC.
Bibliographic data for series maintained by Maxine Collett ().

 
Page updated 2025-03-20
Handle: RePEc:sbs:wpsefe:2008fe20