Is it Free Cash Flow, Tax Savings, or Neither?An Empirical Confirmation of Two Leading Going-private Explanations:The Case of ReLBOs
Arman Kosedag and
William R. Lane
Additional contact information
Arman Kosedag: Sabanci University, Turkey,
Journal of Business Finance & Accounting, 2002, vol. 29, issue 1&2, 257-271
Firms which 'go private' via a leveraged buyout (LBO) retain the option to 'go public' again, a process known as a reverse LBO transaction. This paper examines the rarer phenomenon of reLBOs; that is, the practice of going private via leveraged buyout, reobtaining public status through a new initial public offering, and then going private a second time. Among the several alternative hypotheses explaining LBOs, we focus on two prominent ones - free cash flow and tax savings - to explain reLBOs. With a sample of 21 reLBO firms, we find no empirical support for the free cash flow hypothesis but detect a significant relationship between the decision to go private for the second time and the tax savings potential of the firm. Copyright Blackwell Publishers Ltd 2002.
References: Add references at CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed
Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/1468-5957.00431 link to full text (text/html)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:jbfnac:v:29:y:2002:i:1&2:p:257-271
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0306-686X
Access Statistics for this article
Journal of Business Finance & Accounting is currently edited by P. F. Pope, A. W. Stark and M. Walker
More articles in Journal of Business Finance & Accounting from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().