A test of LBO firms' acquisition rationale: The French case

Abstract

We investigate whether the characteristics of Leveraged Buy-Out (LBO) targets before the deal differ from those of targets that have undergone another type of transfer of shares. Specifically, we examine the size, value, industry, quotation and profitability of French targets involved in transfers of shares between 1996 and 2004. Using two different methods (a classical logit regression and a mixed discriminant analysis), results show that LBO targets are more profitable, that they are more frequently unquoted, and that they more often belong to manufacturing industries in comparison with the targets involved in other types of transfers of shares. © Springer-Verlag Berlin Heidelberg 2011.