 The short happy life of Celiant Corporation: Did managerialism at Lucent Technologies divert shareholder wealth to private equity investors?Monica Banyi, Dennis Caplan and Roger Graham CRITICAL PERSPECTIVES ON ACCOUNTING, 2011, vol. 22, issue 4, 337-350 Abstract: Proponents of private equity investment in corporate ventures assert that private equity creates shareholder wealth by alleviating agency costs, improving venture governance, and allocating resources more efficiently. Critics claim private equity expropriates wealth from public company shareholders to private investors and managers. We use managerialism as a framework to examine these competing claims in the context of the power amplifier business at Lucent Technologies. Lucent spun off this business in 2001 into a company called Celiant Corporation, and then sold Celiant in a series of transactions in 2001 and 2002. We estimate that Lucent contributed assets to Celiant worth $330 million, but that the spin-off and sale of Celiant generated only $91 million for Lucent's shareholders. The apparent loss of over $200 million of shareholder wealth is consistent with a scenario in which Lucent managers and private equity investors used their superior information for personal gain. Keywords: Intrapreneurship; Managerialism; Lucent Technologies; Private equity (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:crpeac:v:22:y:2011:i:4:p:337-350 DOI: 10.1016/j.cpa.2011.02.003 Access Statistics for this article CRITICAL PERSPECTIVES ON ACCOUNTING is currently edited by Marcia Annisette, Christine Cooper and Yves Gendron More articles in CRITICAL PERSPECTIVES ON ACCOUNTING from Elsevier |
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