The Performance of Leveraged Buyout-Backed Initial Public Offerings in the UK

49 Pages Posted: 7 Apr 2008

See all articles by Christian von Drathen

Christian von Drathen

University of Texas at Dallas - Naveen Jindal School of Management

Flaviano Faleiro

London Business School

Abstract

This paper investigates the long-term stock price performance of initial public offering (IPO) firms in the United Kingdom that were previously owned by leveraged buyout (LBO) funds. A sample of 128 LBO-backed IPOs and 1,121 non-LBO-backed IPOs between 1990 and 2006 is analysed for the long-term performance of these offerings. The analysis suggests that LBO-backed IPOs beat the stock market and outperform non-LBO-backed IPOs. The analysis identifies factors driving outperformance, most significantly the percentage of share capital held by the buyout group after the offering.

Keywords: initial public offerings (IPOs), private equity, leveraged buyouts (LBOs), reverse leveraged buyouts (RBLOs), stock price performance, long-term event study, United Kingdom (UK)

JEL Classification: G12, G14, G15, G24

Suggested Citation

von Drathen, Christian and Pires Faleiro, Jose Flaviano, The Performance of Leveraged Buyout-Backed Initial Public Offerings in the UK. Available at SSRN: https://ssrn.com/abstract=1117185 or http://dx.doi.org/10.2139/ssrn.1117185

Christian Von Drathen (Contact Author)

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
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Jose Flaviano Pires Faleiro

London Business School ( email )

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Regent's Park
London, London NW1 4SA
United Kingdom
+44 (20) 7000 7000 (Phone)

HOME PAGE: http://www.london.edu

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