Hostile Takeovers and Intangible Resources : An Empirical Investigation

Studying a sample of firms drawn from the 1980 Value Line, results demonstrate that firms which are poor diversifiers and those that fail to build rent- generating strategic resources are the most frequent targets of hostile takeover

The Characteristics of Leveraged Buyout Firms

This paper investigates the determinants of leveraged buyout (LBO)activity by comparing firms that have implemented LBOs to those that have not. The analysis considers sources of gains from LBOs as well as the costs that can arise from the large amount of debt included in their financial strutures. Consitent with the free cash flowe theory we find that firms that initiate LBOs can be characterized as having a combination of unfavorable investment opportunities (low Tobin's q) and relatively high cash flow. In addion, firms likely to have high costs of financial distress (e.g. firms with high R&D expenditures), are less likely to do LBOs

The Determinants of Leveraged Buyout Activity: Free Cash Flow vs. Financial Distress Costs

This paper investigates the determinants of leveraged buyout activity by comparing firms that have implemented leveraged buyouts to those that have not. Consistent with the free cash flow theory, the authors find that firms that initiate leveraged buyouts can be characterized as having a combination of unfavorable investment opportunities (low Tobin's q) and relatively high cash flow. Leveraged buyout firms also tend to be more diversified than firms that do not undertake leveraged buyouts. In addition, firms with high expected costs of financial distress (e.g, those with high research and development expenditures) are less likely to do leveraged buyouts

The Causes of Corporate Refocusing

Data from Compustat database was examined to detect which firms refocused and begin to understand why they did so. It was found thatduring the 1980s the largest firms diversified and smaller firms refocused. The analysis ends by noting that this may be due to the increasing domination of the economy by large firms