Hege, Ulrich, Lovo, Stefano, Slovin, Myron B. and Sushka, Marie E. (2018) Divisional Buyouts by Private Equity and the Market for Divested Assets. Journal of Corporate Finance, 53. pp. 21-37.

This is the latest version of this item.

Full text not available from this repository.
Identification Number : 10.1016/j.jcorpfin.2018.08.016


We study the role and performance of private equity (PE) in corporate asset sales. Corporate sellers obtain significantly positive excess returns in PE deals, gains in wealth significantly greater than for intercorporate asset sales. Based on exit valuations for 98% of PE deals, we find gains in enterprise value in buyouts are significantly greater than for benchmark firms. Corporate seller excess returns are positively correlated with subsequent gains in asset enterprise value. A parsimonious auction model suggests that only restructuring capabilities of PE (not acquisition of undervalued assets) can explain the pattern of the gains generated in these PE deals.

Item Type: Article
Language: English
Date: December 2018
Refereed: Yes
Uncontrolled Keywords: Divisional buyouts, asset sales, private equity, restructuring, auction
JEL Classification: G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 13 Sep 2018 07:35
Last Modified: 02 Apr 2021 15:58
OAI Identifier: oai:tse-fr.eu:32934
URI: https://publications.ut-capitole.fr/id/eprint/26249

Available Versions of this Item

View Item