He, Zheng. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2008. / Includes bibliographical references (leaves 53-54). / Abstracts in English and Chinese. / CONTENT --- p.1 / Chapter CHAPTER I. --- INTRODUCTION --- p.2 / Chapter CHAPTER II. --- LITERATURES REVIEWS --- p.5 / Chapter CHAPTER III. --- FEATURES OF MBO IN CHINA --- p.14 / Chapter 3.1 --- Dichotomy of stock structure --- p.14 / Chapter 3.2 --- Pre-buyout Ownership structure --- p.14 / Chapter 3.3 --- Buyout styles --- p.15 / Chapter 3.4 --- MBO CONSEQUENCES --- p.16 / Chapter CHAPTER IV. --- DATA DESCRIPTION --- p.17 / Chapter CHAPTER V. --- EMPIRICAL RESULTS --- p.22 / Chapter 5.1 --- Underbidding Analysis --- p.22 / Chapter 5.1.1 --- Transaction Variables --- p.29 / Chapter 5.1.2 --- Corporate Governance Variables --- p.32 / Chapter 5.1.3 --- Regional Variables --- p.35 / Chapter 5.1.4 --- Multivariate Regressions: --- p.36 / Chapter 5.2 --- Performance Analysis --- p.41 / Chapter 5.2.1 --- Control Group Matching --- p.41 / Chapter 5.2.2 --- DID Estimation --- p.43 / Chapter 5.2.3 --- Longer Performance Comparison --- p.46 / Chapter 5.2.4 --- Comparison with other M&A --- p.48 / Chapter CHAPTER VI. --- CONCLUSIONS --- p.50 / REFERENCE --- p.53 / TABLES AND CHARTS --- p.55

Huang, Fang. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2008. / Includes bibliographical references (leaves 35-39). / Abstracts in English and Chinese. / Chapter 1. --- Introduction --- p.7 / Chapter 2. --- Review of literatures and regulations --- p.12 / Chapter 2.1. --- MBO in the US --- p.12 / Chapter 2.2. --- MBO in China --- p.14 / Chapter 3. --- Data selection and sources --- p.16 / Chapter 4. --- Announcement effect of MBO --- p.17 / Chapter 4.1. --- Research method --- p.18 / Chapter 4.2. --- Group division of MBO companies --- p.18 / Chapter 4.2.1. --- Division rules --- p.18 / Chapter 4.2.2. --- Apparent MBO: significant negative --- p.19 / Chapter 4.2.3. --- Founder buyouts: significant positive --- p.20 / Chapter 4.2.4. --- Other groups: insignificant positive but not representative for MBO effect --- p.20 / Chapter 4.3. --- Factor analysis --- p.21 / Chapter 4.3.1. --- Year: before 2003/ after 2003 (include 2003) --- p.21 / Chapter 4.3.2. --- Underlying asset: parent company / the listing company itself --- p.22 / Chapter 4.3.3. --- ESOP participation: Yes/No --- p.23 / Chapter 4.3.4. --- Competitive purchaser: Yes/No --- p.23 / Chapter 4.3.5. --- Results: Success / Failure --- p.24 / Chapter 4.4. --- Summary of announcement effect --- p.25 / Chapter 5. --- Evidence on profitability and pricing --- p.25 / Chapter 5.1. --- Data and methodology --- p.26 / Chapter 5.2. --- Profitability of MBO companies --- p.28 / Chapter 5.3. --- DuPont analysis of companies with successful MBO --- p.29 / Chapter 5.4. --- Dividend payment --- p.31 / Chapter 5.5. --- Shareholder´ةs returns --- p.32 / Chapter 5.6. --- MBO pricing and pre-MBO behavior of NAV --- p.33 / Chapter 6. --- Conclusion --- p.33

Management Buy-Outs occur when the managers of a company buy the company from its owners, namely the shareholders. Where such a company is a listed public company, the transaction is known as "going private. 11 The critics allege that this type of buy-out leads to irreconcilable conflicts of interests, a breach of fiduciary duties and to insider trading by the directors. For this reason Management Buy-Outs should be prohibited or alternatively, regulated to such an extent as to make them virtually unworkable. It is submitted that these conflicts are not irreconcilable and that they are no different to the myriad of other conflicts which arise out of the promotion, incorporation and the operation of a company. Both statute and the common law effectively deal with most of the critics' apprehensions without necessarily prohibiting the transactions giving rise to them. / Private Law / LL.M

Management Buy-Outs occur when the managers of a company buy the company from its owners, namely the shareholders. Where such a company is a listed public company, the transaction is known as "going private. 11 The critics allege that this type of buy-out leads to irreconcilable conflicts of interests, a breach of fiduciary duties and to insider trading by the directors. For this reason Management Buy-Outs should be prohibited or alternatively, regulated to such an extent as to make them virtually unworkable. It is submitted that these conflicts are not irreconcilable and that they are no different to the myriad of other conflicts which arise out of the promotion, incorporation and the operation of a company. Both statute and the common law effectively deal with most of the critics' apprehensions without necessarily prohibiting the transactions giving rise to them. / Private Law / LL.M

Thesis (M.P.A.)--University of Hong Kong, 2003. / Includes bibliographical references. Also available in print.

Thesis (MBA)--Stellenbosch University, 2005. / ENGLISH ABSTRACT: This study project explains the theory of Leveraged-Buy-Outs and describes the different financial tools than can be used. Special emphasis is laid in the capital structure of a Leveraged-Buy-Out and its impact on the return for the investor. The theory is then put in perspective by giving insight in the case study of the Cognis Group, a speciality chemicals company, based in Germany. It was sold to Private Equity companies in 2001 and since then underwent various refinancing including the issuing of High Yield Bonds and the issuing of Payment-In-KindNotes. / AFRIKAANSE OPSOMMING: Die teorie rakende gehefboomde bestuuroornames en die gebruik van verskillende finansiele instrumente by bestuursoornames word in hierdie werkstuk beskryf. Klem word gelê op die impak wat 'n verandering in die kapitaalstruktuur van die maatskappy op die belegger kan hê as gevolg van 'n gehefboomde bestuursoorname. Die teorie word toegelig deur te vervvys na die Cognis Groep maatskappye in Duitsland as gevallestudie. Die maatskappy het 'n bestuursoorname ondergaan in 2001 asook verskeie veranderinge in die kapitaalstruktuur daarna waar onder andere gebruik gemaak was van lae gehalte effekte.

This dissertation consists of three separate essays which address questions in the field of banking. The first two essays are motivated by the Great Recession, and study key aspects of the experience of commercial banks during this period. One is the impact of liquidity risk on credit supply, and the second is the effect of portfolio choices on the probability of bank failure. The third essay shifts the focus from commercial banks to M & A transactions, and studies the impact of a key provision in merger agreements on the initial offer premium and target firm value. In the first essay, titled "Liquidity Risk and the Credit Crunch of 2007-2009", I document the connection between liquidity risk and the credit crunch experienced during the financial crisis of 2007-2009. Using extensive micro-level data on mortgage loan applications, I construct a measure of the supply of credit that is free from demand-side bias. I then use this measure of credit supply to estimate the effect of cross-sectional differences in unused lines of credit and core-deposit funding on the supply of mortgage credit moving through the crisis. I find that lenders with higher liquidity risk contracted their supply of mortgage credit more. The channel of contraction was significantly stronger for larger lenders, which had the largest exposure to liquidity risk. The first phase of the contraction was due to liquidity risk arising from high exposure to lines of credit and was immediately followed by further tightening due to the collapse of the markets for wholesale funding. I estimate that the total contraction of mortgage lending due to liquidity stresses experienced by lenders during 2007-2009 was $41.5 billion - $61.9 billion, or 5.2%-7.8% of total mortgage originations during that period. In the second essay, titled "Commercial Bank Failures During The Great Recession: The Real (Estate) Story" I identify the channels through which shocks to the real estate sector contributed to the wave of commercial bank failures during the Great Recession. I focus on the banks' loan, marketable securities and credit line portfolios, and consider how choices which shifted the composition of each portfolio towards real estate products impacted the probability of bank failure. I find that augmenting a baseline model of failure with variables that capture the composition of these three portfolios improves the fit of the model by approximately 70% for small banks and 230% for large banks. I find no evidence that banks which held more of their loans in traditional closed-end mortgages suffered a higher probability of failure. Rather, it was investments in loans for multifamily properties and other non-household real estate loans, as well as off-balance sheet exposures to credit lines issued to non-household real estate borrowers, that are robustly identified as precursors of bank failure for both small and large banks. Exposure to open-end residential real estate loans contributed to the failure rates of small banks only. Exposure to private-label MBS is strongly associated with a higher probability of failure for large banks, but not for small ones. On the other hand, high holdings of agency MBS are associated with a higher probability of failure only for smaller banks, but this result is less robust. The third essay, titled "No Free Shop: Why Target Companies in MBOs and Private Equity Transactions Sometimes Choose Not to Buy 'Go Shop' Options" is joint work with Charles W. Calomiris and Donna M. Hitscherich. In this essay, we study the decisions by targets in private equity and MBO transactions whether to actively "shop" their initial acquisition agreements prior to the shareholders' approval of those contracts. Specifically, targets can insert a "go-shop" clause into their contracts, which permits them to use the agreement to solicit offers from other would-be acquirors during the "go-shop" window, during which the termination fee paid by the target is temporarily lowered. We consider the "go-shop" decision from the theoretical perspective of value maximization under asymmetric information, and also consider conflicts of interest on the parts of management, bankers, and attorneys that might affect the decision. Empirically, we find that the decision to retain the option to shop an offer is predicted by various firm attributes, including larger size, more fragmented ownership, and various characteristics of the firms' legal advisory team and procedures. These can be interpreted as reflecting a combination of informational characteristics, litigation risk, and attorney conflicts of interest. We employ legal advisor characteristics as instruments when analyzing the effects of go-shop decisions on target acquisition premia and value. We find, as predicted in our theoretical framework, that go-shops are not a free option; they result in lower initial acquisition premia, ceteris paribus. Our theoretical framework has an ambiguous prediction about the effects of go-shop choice on target firm valuation. Consistent with theory, we find no significant effect on abnormal returns from choosing a "go-shop" option.

published_or_final_version / Public Administration / Master / Master of Public Administration

This cumulative dissertation aims to complement existing literature with insights on two topics gaining strong importance in the Private Equity Industry: 1) cross-border investments and 2) co-investments with portfolio firm management in times of uncertainty. Results in paper on cross-border investments suggest that the physical presence of a local office of PE firms can actually make a difference for foreign investments. With a local office, operating performance of PE firms is higher after the buyouts. Local offices are especially beneficial for performance the higher the perceived foreignness between PE firm and portfolio firm is. In addition, PE firms increase deal flow after a local office opening, do less syndicates and have higher deal volumes. Respective results imply it is worth in future research to differentiate between pure cross-border deals and deals operated through a local office. The forth paper sheds light on the positive relationship between management buyouts (MBOs) and economic policy uncertainty. Analyses indicate that access to information is a relevant channel for higher propensity of MBOs in uncertain times.:1 Introduction 1.1 Trends in private equity industry 1.2 Overview of essays 2 The Cross-Border Buyout Next Door 2.1 Introduction 2.2 Theoretical background 2.3 Data 2.4 Operating performance results 2.5 Insights from semi-structured interviews 2.6 Conclusion 3 Opening a Local Office - PE Firms' Engine for International Expansion? 3.1 Introduction 3.2 Theoretical background 3.3 Sample and data 3.4 Determinants of office openings 3.5 Impact of local offices 3.6 Conclusion 3.A Appendices 4 Entrepreneurial Activity in Times of Uncertainty: The Case of Management Buyouts 4.1 Introduction 4.2 Literature review and hypotheses 4.3 Material and methods 4.4 Results and discussion 4.5 Conclusions 4.A Appendices References

China's different economic environment, government infrastructure, and legal system might cause different management buyout procedures and results from management buyout procedures in the United States. Management buyout was originally created to increase efficiency and reduce agency cost in the United States in the 1960s; but management buyout in China is merely a tool to provide incentive programs for current management teams and reduce state-owned corporate shares.