재무연구 제 권 호 (2011년 5월)
Asian Review of Financial Research, Vol., No..
pp.637~671
pp.637~671
Corporate control through Management Buyouts
Kai Chen Tillman School of Business, Mount Olive College, Mount Olive, NC 28365
Yong-Cheol Kim Lubar School of Business, University of Wisconsin-Milwaukee, Milwaukee, WI 53201
Richard D. Marcus Lubar School of Business, University of Wisconsin-Milwaukee, Milwaukee, WI 53201
This paper investigates the effects of managerial ownership on shareholder wealth gains in management buyouts to study whether target managers expropriate public shareholder interests when they buy out a firm. We find that the transaction premiums are negatively associated with the buyout managers’ stock holdings, but not with their option holdings. This evidence indicates that acquiring managers, using their corporate power associated with their stock holdings, pursue their own interests at the expense of public shareholders, and that their interest in the post-buyout firm dominates their interest associated with their options. We also find that the transaction premiums are not associated with the nonbuyout managers’ stock and option holdings.
Kai Chen
Yong-Cheol Kim
Richard D. Marcus
This paper investigates the effects of managerial ownership on shareholder wealth gains in management buyouts to study whether target managers expropriate public shareholder interests when they buy out a firm. We find that the transaction premiums are negatively associated with the buyout managers’ stock holdings, but not with their option holdings. This evidence indicates that acquiring managers, using their corporate power associated with their stock holdings, pursue their own interests at the expense of public shareholders, and that their interest in the post-buyout firm dominates their interest associated with their options. We also find that the transaction premiums are not associated with the nonbuyout managers’ stock and option holdings.
